As the deadline for life insurers to re-file their products nears, life insurance companies are awaiting approvals from the Insurance Regulatory and Development Authority (IRDA) for traditional products, which constitute a major part of their product portfolio.
According to the IRDA guidelines, life insurers are required to realign all their existing products by October 1 and withdraw those that are not approved by the regulator.
New structure
The new structure prescribes higher insurance cover plus other benefits, such as higher minimum surrender value and death benefit.
A senior IRDA official said the regulator is working overtime and will ensure each company has at least 2-3 of its popular products to sell after October 1. The regulator is granting priority-wise approval to life insurance companies and has approved 300 products so far. The official said the regulator will approve 90 products by next week and the remaining 60 products by October.
According to Anup Rau, Chief Executive Officer of Reliance Life, the company has re-filed products based on the amount of volume generated and the feedback from its distributors.
While private life insurance companies have got almost all their unit-linked products approved by the regulator, they are still awaiting approval for the popular endowment and traditional products which constitute more than 50 per cent of their portfolio.
Kotak Life Insurance, for instance, has got approval for all its unit-linked products, but has got only one product approved under the traditional product platform which constitutes 85 per cent of its portfolio, said G. Murlidhar, Managing Director.
On behalf of the industry, the Life Insurance Council has asked the regulator to extend the October 1 deadline.
Rajesh Relan, Managing Director and Country Manager, PNB MetLife India, said: “Product re-filing is one part of the process as after re-filing there are multiple rounds of communications and clarifications between the company and the regulator. After approval, companies will have to train the sales team and start the marketing-related activities.”
HDFC Life Insurance has launched four products which are compliant with the new regulations.
Niraj Shah, Senior Vice-President and Head, Products, ICICI Prudential Life Insurance, said the company has filed most of its products with the regulator and has received approvals across product categories, which will be launched in a phased manner.