As ULIPs or market-linked insurance plans make a big comeback, leading private sector life insurer Reliance Life’s CEO Anup Rau said this reversal of trend would hurt the industry and the regulator is already looking into the matter.
Before the meltdown of 2008, ULIPs were very popular, including through large-scale misselling, but plunge in stock markets led to huge losses for investors as also for fund managers.
As markets gain momentum, investors are again being lured into investing in ULIPs but they may face the heat in case markets fall.
Industry data shows that all companies, including LIC, selling purely traditional products have registered a decline in sales. On the other hand, ULIPs have been driving growth for some players including some large insurers and those promoted or supported by banks.
“After the 2008 meltdown, almost all companies swore not to sell ULIP products and stick to long term traditional products.
Asked whether the regulator needs to intervene so that there is no over-dependence on ULIPs, Rau said, “The regulator, IRDA, had introduced major changes in the ULIPs, sometime in 2010, making it more affordable for the inv ..
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