ULIPs Redefined in India
Case Code: INS055
Case Length: 12 Pages
Pub Date: 2011
Teaching Note: Not Available
Organization: Insurance Regulatory Development Authority of India
Themes: Government & Economy
Abstract Case Intro Excerpts
Unit Linked Insurance Plans (ULIPs) scored high over traditional insurance plans and achieved around 90% of the portfolio in Indian insurance industry in short span of time.
At the same time, the growing market potential sparked dubious methods in selling by distributors and unethical practices by companies.
Insurance regulator IRDA initiated curbs to contain mis-selling and wrong practices. Stock market regulator raised controversy claiming ownership of ULIPs. It argued that ULIPs mimic mutual funds which were in its purview.
This development created chaos in huge base of customers and insurance market and both regulators went into legal battle. Government involved to solve the case on priority, held consultations with all related stake holders and promulgated an ordinance favoring IRDA. IRDA also revamped ULIPs and issued fresh guidelines with features like longevity, cap on charges, and increase in life cover and minimum guarantee in annuity products. IRDA Chairman Harinarayana opined that the changes were aimed to benefit customers and companies in the long run and for sustained development of the industry.
- Life insurance concepts and life insurance industry growth in India
- How unit linked insurance plans fuelled market growth and further triggered unethical practices by sellers and companies
- Why SEBI raked up controversy to get hold on ULIPs market and how the issue has been resolved
- What are new guide lines introduced by IRDA for ULIPs and their implications to customers and companies
ULIPs in India
Mis-Selling and Other Unethical Practices
New Guidelines for ULIPs
Unit Linked Insurance Policies, ULIP, Life Insurance Policies, SEBI, IRDA, ULIPs New Guidelines, Traditional Insurance Plans
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