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Saturday, January 29, 2011

Another year before insurance cos stabilise: Irda

The growth rate of insurance companies may come down this fiscal and it will take a year before they stabilise, the Insurance Regulatory and Development Authority (Irda) said today. Irda Chairman J Hari Narayan stated this when asked about the impact of new Ulip norms announced by the regulator last year. The new norms came in to affect from September 1, 2010.

He said growth may be affected not only due to the developments within the industry but also overall economy. Insurance companies are of the opinion that certain provisions of new ULIP norms like capping of surrender charges and the even distribution of charges over the lock-in period of five years will adversely impact the profitability of companies. Ulip sales will also be adversely affected as agents may be unwilling to sell products at lower commissions.

Replying to a question, the regulator said the insurance companies expressed concern over norms
on pension products. He said the draft guidelines of IPO norms for life insurance companies will be issued next month and refused to divulge further details.

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