You are here: Home » Finance » News » Insurance
Business Standard

LIC stops selling 14 life policies over Irda diktat

India's largest insurance company has decided to stop selling as many as 14 policies, including Jeevan Mitra and Anmol Jeevan

BS Reporter  |  Mumbai 

Life Corporation of India (LIC) has decided to stop selling 14 policies, including popular ones such as Jeevan Mitra and Anmol Jeevan, in order to comply with the Regulatory and Development Authority (Irda)’s order to implement the new product guidelines.

Five policies, including Jeevan Mitra, Jeevan Pramukh Plan and LIC’s Bima Account I and II, will go off the shelves from Saturday. Further, two others, New Jeevan Nidhi and Anmol Jeevan I, will be discontinued from November 30.

Industry sources pointed out that seven out of the 14 products that LIC has decided to stop selling, have been withdrawn with effect from November 16. These include Convertible Term Assurance and Children Deferred Endowment Assurance, among others.

Irda had brought out a new set of guidelines for life products in February 2013. While the minimum death benefit and surrender value was altered for traditional product customers, who stay invested in a policy for a longer period, in the case of unit-linked products (Ulips), insurers will have to intimate customers about changes in the yield of the Ulip every month. The rules had also banned the sale of highest net asset value products, on the ground that these are not in the consumer interest.

While notifying the guidelines, Irda had said life insurers had to be compliant with the new norms by October 1, 2013. Following a representation from the life insurers to extend the deadline, the new deadline was changed to January 1, 2014, to implement the new product guidelines. LIC officials said there was nothing significant about the decision to stop selling 14 products.

“This is part of our compliance to the new product norms. There is no cause for worry. New products will be launched to substitute them,” said a senior LIC official. He, however, refused to comment on the exact number of plans withdrawn. Irda had also extended the deadline to phase out group products not complying with the new guidelines from July 1. Later, this deadline was extended to August 1.

According to LIC's website, it has already withdrawn 19 products that include Jeevan Nischay, Market Plus I, Wealth Plus, Jeevan Nidhi, Jeevan Vaibhav (Single Premium Endowment Assurance Plan), Child Fortune Plus and Jeevan Sugam, among others.

India’s largest insurance company collected new premiums of Rs 37,906 crore for the April-September 2013 period, compared to Rs 35,341.53 crore in the year-ago period — a growth of 7.25 per cent. The insurance sector collected Rs 50,056.56 crore of new premiums during this period, with a rise of 6.5 per cent over the last year.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, November 23 2013. 00:16 IST