IRDAI will soon allow life insurance companies to offer index-linked products to their customers.
The insurance regulator has set up a six member working group to look at various aspects of index linked products.
Currently, IRDAI regulations do not allow insurers to sell index funds. However, the insurance regulator has received requests from life insurers to allow them to offer index linked products along with ULIPs.
The working group headed by Dinesh Pant, Member, Appointed Actuary, LIC India will examine:
- Need for index-linked products in India especially availability of various indexes and how it will better serve the needs and interests of customers relative to traditional savings product
- Study of existing index linked products like passive mutual funds
- Study practices of other jurisdictions in respect of index linked product structure and their operations
- Provide recommendations on specific aspects like product structure and its pricing and suggestions on possible amendments to current regulations like product and investment regulations
IRDAI has asked the working group to submit its report within two months.
