Insurance regulator IRDAI has mooted changes to some regulations pertaining to life insurance products, including one on the quantum of minimum death benefit.
Seeking comments from stakeholders on the draft IRDAI (Linked Insurance Products) Regulations and IRDAI (Non-Linked Insurance Products) Regulations, it said the review comes in the backdrop of changing customer preferences.
Changes in trends
“There were significant changes in the trends in product structures driven by the customers’ needs, wants and preferences. Industry was also representing to review various provisions of the current product regulations to ensure insurance products cope with the dynamism of the market,” the exposure draft said.
Figuring in the list of “key changes proposed” in the regulations is one to extend the revival period of the policies to five years from the current two years in respect of non-linked products and providing an option for commutation up to 60% in respect of pension products.
The minimum death benefit has been made seven times for regular premium products and 1.25 times for single premium products for all ages. Another change suggested is allowing partial withdrawal for linked pension products. Insurers can now design individual term, group term and credit and micro insurance products which offer a range of policy terms, the draft said.
For the draft regulations, IRDAI had formed a Committee on Review of Product Regulations – Life. Consequently, public comments were invited on the committee’s report. The regulator had also constituted a working group to consider the recommendations of the committee.
