Insurance regulator IRDAI has adopted a strict attitude towards ULIP i.e. Unit Linked Policies. The regulator has clearly told the insurance companies to stop showing ULIP as an investment in their advertisements. The regulator has recently issued a master circular regarding this.
Master Circular on ULIP Advertisements
The Insurance Regulatory and Development Authority of India issued a master circular on June 19 regarding ULIP advertisements. In the circular, IRDAI has banned showing unit linked or index linked products as investment products in advertisements. The regulator has issued detailed guidelines regarding this and asked the insurance companies to follow them.
Services other than insurance will not be advertised
The regulator has also asked the insurance companies to avoid many things in advertisements. For example, companies cannot advertise any service that is not related to insurance. In the case of a general insurance product, insurance companies cannot compare rates or discounts with old rates. Insurance companies cannot highlight the potential benefits of an insurance product without clearly stating the risks.
Ban on exaggerating benefits
Similarly, insurance companies have been told that while describing partial benefits, they should also give information about the limitations, conditions etc. associated with it. Without doing so, they cannot only tell about partial benefits. Insurance companies cannot exaggerate the benefits of any insurance product. Companies cannot say inappropriate things about the image of any competitor.
These things will have to be told in advertisements
After the guidelines of IRDAI, insurance companies will now have to give complete information in simple language about the variable annuity pay-out option in the advertisement of any unit linked insurance product, index linked product or annuity product. In the advertisements, they will also have to give information about the possible fluctuations in the return on investment. If there is no data of at least one old year, then in such a case companies cannot show old data in advertisements. If companies show old data, they will have to use the same font and size. Along with this, companies will also have to tell about the performance of the correspondent index.
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