The insurance industry is not happy with the second exposure draft on product design and pricing. In particular, it wants to discuss the norms for Guaranteed Surrender Value with the insurance regulator, reports CNBC-TV18’s Mitra Joshi.
Insurance regulator IRDA's second exposure draft on product design and pricing has evoked mixed reactions from the industry. Most players welcome the norms, which give clarity on cover in traditional products. But, the Guaranteed Surrender Value norms have insurance companies atwitter.
Currently, the minimum guaranteed surrender value is 30% of the total premium paid, minus the first year premium. But now, this will be governed by a slab.
For second and third year, it will be 50% of the total premium paid. For fourth year, it will be 75% of the total premium paid. For fifth and sixth year it will be 90% of the total premium paid, and from seventh year onwards, it will be 100% of the total premium paid.
Players say these slabs will leave nothing for the insurance companies themselves, and are pushing for talks with IRDA to soften the blow.
14/8/12 Money control.com
Insurance regulator IRDA's second exposure draft on product design and pricing has evoked mixed reactions from the industry. Most players welcome the norms, which give clarity on cover in traditional products. But, the Guaranteed Surrender Value norms have insurance companies atwitter.
Currently, the minimum guaranteed surrender value is 30% of the total premium paid, minus the first year premium. But now, this will be governed by a slab.
For second and third year, it will be 50% of the total premium paid. For fourth year, it will be 75% of the total premium paid. For fifth and sixth year it will be 90% of the total premium paid, and from seventh year onwards, it will be 100% of the total premium paid.
Players say these slabs will leave nothing for the insurance companies themselves, and are pushing for talks with IRDA to soften the blow.
14/8/12 Money control.com
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