CIRCULAR ON MODIFICATION PERMITTED TO WITHDRAWN LIFE INSURANCE PRODUCTS.

IRDAI vide Circular dated August 31, 2023 has notified about the modifications permitted to withdrawn Products of Life Insurers. The objective for issuing this circular is to provide:

a. options/benefits to existing policyholders.

b. flexibility while ensuring that policyholders benefits are not adversely impacted.

1. The following options in respect of withdrawn products of Life Insurers are allowed:

a. Addition of existing riders which are open for sale.

b. Addition of premium payment modes (frequencies).

c. Reduction in interest rate for revivals/policy loans.

d. Addition of one or more payment frequencies to income benefits payable to policyholders.

Conditions to be satisfied while allowing the above-mentioned options:

i. withdrawn File and Use applications shall not be altered/amended while offering the above options to the existing policyholders.

ii. an addendum listing the changes in chronological order as per format prescribed in Annexure I, is maintained in respect of the withdrawn File and Use application, on ongoing basis incorporating all the changes made till the date.

iii. the policyholders are suitably informed about the options and a specific request has been obtained from policyholders in respect of point a, b & d (as mentioned above).

iv. changes are appropriately documented in the respective policy document.

v. offering the above options is not detrimental to the interests of the policyholders.

vi. extant norms while offering the options as allowed under the circular are complied with.

vii. proper system and processes are in place such that the policyholders are appropriately informed of the options available and take a well-informed decision.

viii. the term of rider does not exceed outstanding policy term under the base policy.

2. The Product Management Committee (PMC) constituted as per para 5 of section A of chapter I shall review and approve the changes to be introduced as allowed under para 4 of this circular. *

3. Statement of changes to withdrawn products, shall be submitted on annual basis along with Appointed Actuary’s Annual Report.

4. Insurer shall ensure that entire set of documents is maintained which shall be submitted to IRDAI in respect of the products identified, whenever called for.

Ref:

Circular IRDAI/ACTL/CIR/PRO/207/10/2022 dated October 04, 2022:

“SECTION-A: PRODUCT MANAGEMENT FRAMEWORK FOR U&F

4. The provisions of this Section are applicable for products and riders filed under U&F procedure, including both new products/riders and modifications.

5. Board Approved Product Management & Pricing Policy (BAPMPP) and Product Management Committee (PMC):

5.1 Every Life Insurer shall have a Board Approved Product Management & Pricing Policy (BAPMPP).

5.2 The Board of insurer shall constitute a Product Management Committee (PMC), which shall have Appointed Actuary, Chief Risk Officer, Chief Marketing/Distribution Officer, Chief Technology Officer and Chief Compliance Officer of the insurer as members. In addition to the above, the insurer may include other members of its senior management in the PMC as members or as invitees.”

Source category: IRDAI

Attachments

• /2023/254_Circular_on_Modification_Permitted_to_withdrawn_Life_Insurance_Products_.pdf
• /2023/254_Format.pdf