Change in guidelines for life insurance products meant that non-compliant products had to withdrawn by November 30. Life insurers have received a two-month extension to withdraw products.
Life insurance companies have been given a two-month extension to withdraw products and riders that are not in tandem with the new product regulations. This is a good news for policyholders as they would have no sudden dearth of products to choose from, while for insurers this means that they have more time to get products out of the market.
The Insurance Regulatory and Development Authority of India (IRDAI) had earlier asked insurers to withdraw products by November 30. But this deadline has now been extended to January 31, 2020.
IRDAI said that they had received representations from Life Insurance Council and various other life insurers, requesting for an extension of the timeline. Insurers had sought an extension citing reasons like the need to ensure system preparedness and necessary training of personnel.
However, the deadline to refile or modify existing products, which was fixed at February 29, 2020, will continue. This applies to products under the linked and non-liked insurance segment.
IRDAI said that the new guidelines with respect to benefit illustrations, periodic statements, agent training for unit-linked insurance plans will be applicable from February 1, 2020 as against the earlier December 1, 2019 deadline.
The regulator had said that the extension does not apply for products already approved under 'File & Use' under the new regulations. IRDAI has advised all life insurers to file these products as early as possible without waiting for the last date available. It also said that the no further requests for extension will be entertained.The new guidelines applicable for traditional and ULIP products will change the surrender values and the sum assured of the policies. Hence it was necessary for insurers to seek an extension so that there was no dearth of products in the market.