Life Insurers Urge Review of Proposed Surrender Charge Rules with IRDAI

7 Feb 2024 , 03:21 PM

Life insurance companies request IRDAI to reconsider surrender charge provisions. Draft product regulations in December proposed lower surrender charges for policy termination.

Policyholders terminating before their original tenure would receive higher premium refunds. Insurers, in a meeting with IRDAI on February 5, urged relaxation of proposed surrender charge rules. Insurers want room for principle-based regulations, giving discretion to companies in surrender payout calculations.

Some argue principle-based approach may not serve customer interests, citing potential lower returns. Concerns raised about insurers yielding to pressure from intermediaries rather than considering customer benefits. Discussions ongoing; insurers fear increase in policy lapsations if surrender value regulations are finalized.

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