The current financial year has already seen 72 new products being developed in the life insurance industry, according to the country’s insurance regulator. Data from the Insurance Regulatory and Development Authority of India (IRDAI) showed that on an average, private insurers had a higher number of new products than Life Insurance Corporation (LIC). Unit Linked Insurance Plans (ULIPs), however, constituted less than half the new products. With digital insurance being given greater importance, the number of insurance products filed for pure online sales was more than five. However, digital as a percentage of the total sales was less than 5 percent in the entire insurance industry. According to the IRDAI data, LIC had filed four products, of which three were modifications to existing products. One product was a new traditional product. The insurer had launched its ULIP product in 2015 after a gap of nearly two years. ULIPs make up less than 10 percent of LIC’s product portfolio, with the other 90 percent being traditional life insurance products. ULIPs became less popular after the regulator modified the norms in September 2010, making the minimum lock-in term for ULIPs five years compared to three years earlier. Product structures including Net Asset Value disclosures were also made transparent in order to curb misselling of these products. Misselling accounts for the largest chunk of life insurance complaints by policyholders. To avoid approval delays, the regulator had curbed insurers from filing too many approvals. Life insurers had earlier said that approval delays had forced them to make changes to their business growth plans. The regulator had earlier devised a new product planner rule, wherein insurance companies could only seek approval for five products a year. Insurers were expected to submit a product planner every financial year, indicating the number of proposals each quarter. IRDAI had also said that should there be more than five products, the insurer should provide supporting market research, product-wise persistency for the 13th, 25th and 37th months as of April 30 the previous year.
