Irda begins clearing new Ulips

“My entire staff is looking forward to a holiday,” says J Hari Narayan, chairman, Insurance Development and Regulatory Authority (Irda).

The Irda office at Parisrama Bhavan, Hyderabad, has been bustling with activity for the past few weeks. With the deadline of September 1— when new Ulip norms kick in — fast approaching, all the 120 employees are working overtime, even late Saturday nights, to ensure all new unit-linked insurance plans (Ulips) are cleared.

The insurance companies have to re-file Ulips so that they are in compliance with the new norms.

Considering the large volume of work to be done in a short span of time, Irda has even requested private insurers to have their officials stationed in Hyderabad to answer queries. These officials are expected to serve as nodal points if the regulator wishes to make last-minute changes.

The clearance is to start from on Tuesday. Eleven policies are expected to be cleared on Tuesday and another 35 in the next two days. By this weekend, all 74 applications should be cleared.

“Yes, there is a lot of rush but we can't take a break till it is wrapped up. We have a responsibility and we will discharge it with utmost precision,” says Narayan.

Multi checks Clearances are required at two levels – actuary and life. Usually, the actuarial department checks for technical and financial details. These include looking into the product design and pricing.

After the first clearance, the product is generally sent to the life department. This division checks the product information and fine print. The process used to take at least a month earlier. Now, both these departments are sitting together to ensure the products are cleared quickly and sent to the chairman for his final approval.

Of the 23 private life insurance companies, most have filed for at least three new policies each. Seven companies are seeking approval for more than three products.

“The last time we were working at this speed, for long hours, was in December 2009,” says the chairman. But that was simpler as that time there was just one change in the structure of these products — the difference between net and gross yields was reduced from four per cent to three per cent.

Since then, a lot of new norms have come. On June 28, Irda introduced many rules that would change the product entirely. For example, guaranteed returns on Ulip pension plans were introduced. Similarly, distributor charges were sought to be distributed over the lock-in period of five years instead of being front-loaded. Insurers were given a deadline of September 1 to launch these new-look products. “By September 1, we will ensure each insurer has at least three products to sell,” says Hari Narayan. Then, maybe, all of Irda can take a holiday.