THE recently issued guidelines to regulate the unit linked insurance policies (ULIPs) are expected to slowdown its sales and impact the overall insurance sector’s growth during the current financial year 2010-11, according to Insurance Regulatory and Development Authority (IRDA).
The industry grew at about 23 per cent during the financial year 2009-10.
ULIPs contribute about 80 per cent of the total premium collections made by private insurance firms. According to the data compiled by IRDA, first-year premium income of life insurance companies fell 20.4 per cent on year to `97.09 billion in December, 2010. While private life insurance companies’ collections fell 21.7 per cent, public sector Life Insurance Corporation of India’s collections declined 19.7 per cent.
First year premium collections indicate the quantum of new business generated by hte insurance companies. In September, 2010 the insurance regulator issued guidelines and asked private players to redesign products besides reducing costs.