IRDAI specifies criteria for advertising ULIPS as investments

New Delhi: The Insurance Regulatory and Development Authority of India (IRDAI) has instructed life insurance companies not to advertise unit-linked plans as investment products. In a recent circular, IRDAI emphasised that unit-linked, index-linked insurance products, and annuity products with variable annuity payout options should clearly disclose their risk factors.

Insurance companies must explicitly state that market-linked insurance plans are different from traditional endowment policies and carry inherent risks. Similarly, participating endowment policies with bonuses must clarify that the projected bonuses in benefit illustrations are not guaranteed.

To enhance transparency, IRDAI mandated that the company's advertisement committee or a senior-level officer of the distribution channel must review and approve advertisements to ensure they are not misleading.

Additionally, IRDAI announced that policyholders can access information on unclaimed amounts with any insurer via the Bima Bharosa portal. Unclaimed life insurance funds include proceeds from insurance policies, such as death or survival benefits, that have not been claimed by the beneficiary or policyholder.

In the Master Circular on Protection of Policyholders’ Interests, Operations, and Allied Matters of Insurers Regulations, 2024, IRDAI specified that this data will be available on a centralised portal and the individual websites of insurers.

IRDAI also urged companies to implement a tech-based, robust grievance redressal mechanism to ensure efficient and speedy resolution of complaints, aiming for "zero grievances." Insurers are required to maintain regular customer interfaces, run awareness campaigns, facilitate online grievance submissions, and ensure all grievances are registered. They must also strengthen their resolution processes with an internal escalation matrix and Internal Ombudsman Schemes.