The Insurance Regulatory and Development Authority of India (IRDAI) has prohibited insurance companies from advertising unit-linked insurance plans, or Ulips, as investment plans in an effort to stop the misrepresentation of life insurance policies as pure investment products.
According to the insurance regulator, all insurers must only mention the underlying life insurance coverage and related products when announcing the launch of ULIP's.
The IRDAI master circular reaffirmed that "the insurer shall not issue any press release or statement without mentioning the life insurance coverage and related products."
This is against the backdrop of insurers introducing small-cap and mid-cap Ulips during the previous two years of steady index rises. Industry players claimed that these products were mis-sold to investors as pure investment vehicles.
Furthermore, the regulator mandated that all advertisements state that past performance does not imply future bonuses or other relevant information. This move is akin to the mutual fund guidelines set forth by the Securities and Exchange Board of India.
Unclaimed Policies
The proceeds of insurance policies, including death or survival benefits, that are not claimed by the policyholder or beneficiary are referred to as unclaimed life insurance funds.
According to the Master Circular on Protection of Policyholders' Interests, Operations, and Allied Matters of Insurers Regulations, 2024, released by IRDAI, this data will be available via a single portal in addition to the websites of the individual insurers.
In an effort to achieve "zero grievances," the regulator has also requested that the companies establish a strong, tech-based grievance redressal mechanism for policyholders. The goal is to resolve complaints quickly and efficiently.
Grievences Redressal
It is mandatory for insurers to create consistent customer interfaces by implementing user-friendly procedures, organizing public awareness campaigns, enabling online grievance submission, and guaranteeing that all grievances are registered.
Additionally, they must fortify their resolution processes by implementing an internal escalation matrix in the event that the initial resolution is not satisfactory. and Programs for Internal Ombudsmen
