IRDAI prohibits insurance firms from advertising ULIPs as 'investment product'

IRDAI said that Unit-linked or index-linked insurance products shall not be advertised as 'investment products'

By  Storyboard18Jun 24, 2024 10:11 AM
IRDAI prohibits insurance firms from advertising ULIPs as 'investment product'
IRDAI said that insurance companies will have to specifically mention that market-linked insurance plans are different from traditional endowment policies. (Photo: Unsplash)

Insurance regulator IRDAI has prohibited insurers from advertising Unit Linked Insurance Plans (ULIPs) as investment products.

The Insurance Regulatory and Development Authority of India (IRDAI), in its latest circular, mentioned that Unit-linked or index-linked insurance products shall not be advertised as "investment products".

"An advertisement on the unit-linked insurance product, index-linked product, and annuity products with variable annuity pay-out option shall contain adequate, accurate, explicit and updated information, in simple language," IRDAI said.

The insurance companies will have to specifically mention that market-linked insurance plans are different from traditional endowment policies and carry risks. In the case of bonus endowment policies, the firms will have to state that bonuses projected in benefit illustrations are not guaranteed.

The IRDAI said that the onus is also on the advertisement committee of the company and senior-level officer of the distribution channel to analyse, examine and approve the advertisements and ensure that they are not misleading.

Further, insurers can outsource permitted activities only if they are economical and efficient in providing services to the customers or enhancing the value of their business, the IRDAI said.

The regulator added that the policyholders can access information on unclaimed amounts with any insurer on the Bima Bharosa portal. It also directed the firms to build a tech-based robust mechanism for grievance redressal of policyholders.

"Insurers are required to establish regular customer interface through the consumer-friendly process, running awareness campaign; facilitate submission of grievances online and ensure registration of all grievances; strengthen resolution process with internal escalation matrix and Internal Ombudsman Schemes," IRDAI mentioned.

First Published on Jun 24, 2024 10:11 AM

More from Storyboard18

Advertising

Global social media ad spend projected to reach $239 billion in 2025, $273 billion by 2026: Report

Global social media ad spend projected to reach $239 billion in 2025, $273 billion by 2026: Report

Advertising

EXCLUSIVE: CCI examines emails of former IBDF President K Madhavan, key officials

EXCLUSIVE: CCI examines emails of former IBDF President K Madhavan, key officials

Advertising

CCI raids: Cloned data from GroupM, Dentsu puts Big Tech under scanner

CCI raids: Cloned data from GroupM, Dentsu puts Big Tech under scanner

Brand Marketing

Global Ads Spotlight: How Verizon and Beyonce's Super Bowl ad broke the internet and the network

Global Ads Spotlight: How Verizon and Beyonce's Super Bowl ad broke the internet and the network

How it Works

CCI raids could accelerate shift from “media muscle” to “strategic agility”, writes indie ad agency Famous Innovations founder

CCI raids could accelerate shift from “media muscle” to “strategic agility”, writes indie ad agency Famous Innovations founder

Advertising

Hypothesis by OML wins Influencer Marketing mandate for Ather Energy

Hypothesis by OML wins Influencer Marketing mandate for Ather Energy

Advertising

Reliance Consumer Products unveils campaign for 'Independence' brand, tapping into deep-rooted culinary traditions

Reliance Consumer Products unveils campaign for 'Independence' brand, tapping into deep-rooted culinary traditions

Brand Makers

Indie agency Talented's bold move and how ESOPs can be a game-changer for adland

Indie agency Talented's bold move and how ESOPs can be a game-changer for adland