Hyderabad:
The insurance regulator IRDAI, on Tuesday, has formed a working group(WG), to be led by Dinesh Pant, appointed actuary of Life Insurance Corporation(LIC), to examine various aspects of Index Linked products in life Insurance segment
Currently, IRDAI, product regulations do not specifically permit insurers to sell index linked products and life insurers have been requesting the IRDAI to allow them to offer index linked products.
The working group will examine the need for index-linked products in India , availability of various indexes and how it will better serve the needs and interests of customers relative to traditional savings product.
The WG will examine the Index linked products, which were earlier available for sale in the Indian market in terms of product structure, ease of customer understanding and administrative processes, sales volumes and any other matter of relevance. The committee will study practices of other jurisdictions in respect of Index Linked product structure, their operations and provide recommendations on specific aspects like product structure and its pricing and reserving along with suggestions on possible amendments to current Regulations like Product and Investment Regulations.
Some of the other members of the WG are- . Anil Kumar Singh, appointed actuary, Aditya Birla Sun Life Insurance,Jose C. John, appointed actuary, Max Life Insurance,Manish Kumar, chief Investment Officer, ICICI Pru Life Insurance.
An Index Linked product operates more or less like a bank account, with each policyholder having a separately managed account. The account value will reflect the premium paid by the policyholder and the interest gained from the particular index to which the fund is linked.
Insurance companies will be required to send a statement of policy account to the policyholder at the end of every reporting period. Minimum death benefit under the new plan is expected be 10 times the life cover or sum assured.