Life insurance companies are queuing up with brand new unit-linked insurance plans (ULIPs), as new regulations that came into force on September 1 marked the end of old schemes.
Within three days, seven life insurance companies have launched more than 12 new ULIPs to get the initial mileage in the market while others are preparing to launch new ULIPs.
"We wanted to make our products available to the customers and launched our ULIPs on time so that there is a seamless continuity of ULIPs that are much in demand," said Deepak Sood, MD and CEO, Future Generali Life Insurance.
Although Future Generali received approval for its product only last week, Sood maintained that proper product training was conducted for the distributors and it is an ongoing process. "One week is more than sufficient to be able to roll out," said Sood.
The seven early birds
HDFC Standard Life
Kotak Mahindra Life
Bajaj Allianz Life
September is likely to see a series of new ULIP launches as life insurance players come in to fill the gap after the new regulations came into force and 20 of the 23 life insurance companies have received product approval for new ULIPs from the regulator — Insurance Regulatory and Development Authority (IRDA).
"We have received IRDA approval for two new ULIPs and we will be launching both the ULIPs this month," said Malay Ghosh, president and executive director, Reliance Life Insurance.
The regulator had initially said that it will approve two ULIP plans for each insurance company as of now but insurers seem to be planning for more. "We would be launching several products in the next few quarters," said Ghosh.
While the new guidelines prohibit high upfront commission and limits the commission at an average of 5-7 per cent per annum from an average of 10-15 per cent per annum earlier (which is still far higher than the no-load practice in mutual funds) it is yet to be seen how the distributors operate under the changed regulations.