Life Insurance Corporation of India (LIC) has decided to stop selling 14 policies, including popular ones such as Jeevan Mitra and Anmol Jeevan, in order to comply with the Insurance Regulatory and Development Authority (Irda)’s order to implement the new product guidelines.
Five policies, including Jeevan Mitra, Jeevan Pramukh Plan and LIC’s Bima Account I and II, will go off the shelves from Saturday. Further, two others, New Jeevan Nidhi and Anmol Jeevan I, will be discontinued from November 30.
Industry sources pointed out that seven out of the 14 products that LIC has decided to stop selling, have been withdrawn with effect from November 16. These include Convertible Term Assurance and Children Deferred Endowment Assurance, among others.
Irda had brought out a new set of guidelines for life insurance products in February 2013. While the minimum death benefit and surrender value was altered for traditional product customers, who stay invested in a policy for a longer period, in the case of unit-linked products (Ulips), insurers will have to intimate customers about changes in the yield of the Ulip every month. The rules had also banned the sale of highest net asset value products, on the ground that these are not in the consumer interest.
While notifying the guidelines, Irda had said life insurers had to be compliant with the new norms by October 1, 2013. Following a representation from the life insurers to extend the deadline, the new deadline was changed to January 1, 2014, to implement the new product guidelines. LIC officials said there was nothing significant about the decision to stop selling 14 products.
“This is part of our compliance to the new product norms. There is no cause for worry. New products will be launched to substitute them,” said a senior LIC official. He, however, refused to comment on the exact number of plans withdrawn. Irda had also extended the deadline to phase out group products not complying with the new guidelines from July 1. Later, this deadline was extended to August 1.
According to LIC's website, it has already withdrawn 19 products that include Jeevan Nischay, Market Plus I, Wealth Plus, Jeevan Nidhi, Jeevan Vaibhav (Single Premium Endowment Assurance Plan), Child Fortune Plus and Jeevan Sugam, among others.
India’s largest insurance company collected new premiums of Rs 37,906 crore for the April-September 2013 period, compared to Rs 35,341.53 crore in the year-ago period — a growth of 7.25 per cent. The insurance sector collected Rs 50,056.56 crore of new premiums during this period, with a rise of 6.5 per cent over the last year.