)
Ulips
Irda capped the charges and commissions on Ulips and fixed the lock-in period to five years.
Pros: Mis-selling of Ulip products reduced drastically
Cons: Average commission in Ulips fell
Health insurance
Removed exit age for a health insurance policy
Pros: Flexibility of choosing hospital of choice
Cons: Premiums to go up by 15 to 20 per cent for customers, due to added services
Investment limits
Raised equity investment limit to 15% for life insurers
Pros: Enabled insurers to investment more in blue chips
Cons: Increases concentration risk
Dismantling third party pool
Irda had dismantled the commercial third-party motor pool and decided to form a 'declined' pool, effective April 1, 2012.
Pros: It freed the pricing model and insurers would be able to price vehicles based on claims.
Cons: Price of third party insurance proposed to be hiked by upto 40%
Product guidelines
These proposed guidelines aim to alter surrender charges and increase commissions for agents
Pros: Products to be more simpler and transparent
Cons: First year premium for customer may rise
Open architecture for bancassurance
Irda has proposed banks can sell insurance products by playing either a corporate agent or a broker to insurance companies
Pros: Will open up bancassurance as vehicle to newer insurers
Cons: May lead to reputational risks for banks
Bone of contention
Ulip guidelines
Irda and Sebi locked horns over Ulips regulation after the markets regulator banned some insurers from selling Ulips. Later the government clarified that Irda would have the right to oversee Ulips.
LIC equity investment limit
Despite Irda’s discomfort, the government gave go ahead to LIC to invest 30% equity in a single company. Irda later issued norms increasing insurance companies’ equity exposure to 15%
Use and file
Irda’s proposal of having Use and file criteria for 18 standard insurance products did not find flavor with insurer on the ground that it discouraged product innovation
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