IRDA puts approval of pension plans on hold

The Insurance Regulatory and Development Authority (IRDA) has put approval of pension products on hold as some fresh changes are to be made.

In December 2011, most of the insurers filed their pension products with IRDA for approval after the rollback of 4.5 % minimum guaranteed return clause on pension products. The clause was rolled back on the demand of insurance companies.

According to media reports, the insurance regulator has written to the insurance companies that the approval process has been stopped as IRDA has to take some policy decisions.

The insurers will have to restructure their products filings and go for fresh approval once the fresh changes are made. It may take another 6 months to complete the whole process. The launch of new products and delay in approvals from IRDA has been one of the main reasons for slow growth in insurance premiums. The decision to hold the approval of new pension products will add pressure on premium growth.

If the media reports are to be believed; the regulator could again bring the 4.5% minimum guaranteed return clause on pension products which could be a bad impact on insurance companies.

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