A committee appointed by the Insurance Regulatory and Development Authority of India (IRDAI) to look into regulations in life insurance has made a far-reaching suggestion that insurers be allowed to offer loans. Further, it has also said that insurers should be allowed to distribute products of non-life and standalone health insurers.
“Allow insurers to lend against their own insurance savings products including ULIPs over and above the surrender value as per the broad parameters that the Authority can set for the industry,” the committee report said.
To start with, insurers can offer loans to their existing customers with acceptance of collaterals under a suitable policy signed-off by the Board of the insurer,” it added.
The committee has also said that the regulator must lower the mandatory proportion of investments in government securities and allow higher quantum in categories like equity and property.
Apart from insurance products, the report has suggested that insurers should be allowed to distribute/market non-financial product and services such as hotel bookings, flights, collection of utility bill payments among others.
The Committee members met multiple times to discuss and deliberate on better value proposition for customers, penetration of life insurance market, increase in policy persistency and steps to further explore distribution landscape.
Amitabh Chaudhry, Managing Director and Chief Executive Officer of HDFC Life, chaired the eight-member committee.
The Committee has also suggested changes in the pension product rules including partial withdrawals and increase in expense limits so that the products can be on par with the National Pension Scheme.