There may be some more waiting for insurance companies before they can start selling pension products as there are some fresh changes on the anvil.
While most insurance companies filed their pension products with Insurance Regulatory and Development Authority or Irda for approval in December 2011 after the 4.5 per cent minimum guaranteed return clause on pension products was rolled back on insurers demand,the regulator has now written to insurance companies that the approval process has been stopped as it has to take some policy decisions.
Irda has written to insurance companies saying that the files are closed because Irda has to take some policy decision, said the head of an insurance firm who did not wish to be named.
Experts within the industry feel that if some fresh changes are made then they will have to restructure their product filings and go for fresh approvals and this may take another six months.
Interestingly,after Irda implemented changes in Ulips and pension products in September 2010,only three insurance companies launched their pension products while the others were pushing for a roll-back on the issue of providing guaranteed return of 4.5 per cent.
While Irda rolled back its decision that asked insurers to provide minimum guaranteed return of 4.5 per cent per annum on pension products,the changed guideline wanted a non-zero positive return both on maturity and in case of surrender. However,guarantee in case of surrender has been a major issue with the insurers and they wanted a roll-back on it, said a senior official with a leading life insurance firm. It is possible that Irda may roll it back.
Sector insiders say that if some new changes are made by Irda then insurers will have to incorporate those changes in their filings and go for fresh approvals.
It is likely that there will be some changes and then we will have to restructure our products and file our products for fresh approvals, said the head of the insurance company.