MUMBAI: The insurance tegulator has said that unit linked insurance plans (
Ulips
) and index-linked plans cannot be promoted as
investment products
.
In a circular, the
Irdai
specified that
advertisements
referring to past
fund performance
must meet strict criteria. They should display compounded annual returns for the previous five calendar years, accompanied by a disclaimer that past performance does not guarantee future results.
If relevant,
benchmark index performance
must also be disclosed alongside fund performance data.
The circular pointed out that advertisements should not overstate benefits, selectively disclose benefits without outlining limitations, or make disparaging comparisons against competitors or the industry.
To ensure compliance, insurers are required to establish an
advertisement committee
under the regulations and appoint
compliance officers
within distribution channels. These entities are responsible for maintaining strict controls over advertisement content and ensuring adherence to approved policies.
Additionally, the regulator has instructed companies to provide policyholders with the option to make online premium payments or appoint a new agent or direct sales staff if the agent who sold the policy leaves the company. The regulator has allowed the
renewal commission
to be paid to the new agent. Furthermore, insurers are now permitted to accept any new policy from the assigned insurance agent or direct sales staff for the same policyholder if the assigned policy is not revived or is surrendered within six months.
