IRDA UNDERTAKES FULL REVIEW OF ULIPS, SOFTENS A-FUND STANCE

India’s Insurance Regulatory & Development Authority (IRDA) is reviewing the entire range of unit-linked investment plan (ULIP) life policies, amid concerns that people taking out policies are unaware of the terms and conditions associated with them. IRDA member R Kannan said that the review aimed to increase the dissemination of information and public understanding of the products, as well as increasing transparency, so that the customer understood the risks involved in taking out such a policy. IRDA had previously directed that there be a gradual phasing out of so-called “actuarial funded” ULIPS. However, yesterday the regulator issued a press release stating that Bajaj Allianz and Aviva Life would be permitted to continue selling the products until they are ready to replace them. In response to the softened stance, Aviva Life managing director Bert Patterson said that “the next step will be to figure out what this means for Aviva and it’s a huge task; when we do that we will go back to IRDA with the time lines”. Once concern relating to IRDA’s directive was that, because Actuarial Funded products were more capital efficient, a change to other more standard ULIPS might necessitate an injection of extra capital. Aviva Life in India is a joint venture of UK-based insurer Aviva and India-based Dabur.