Press Information Bureau

Government of India

Ministry of Finance

14-December-2012 13:02 IST

Insurance Regulatory and Development Authority (IRDA) has informed that the life insurance industry witnessed 8.22 per cent decline in the number of new policies issued during the last financial year 2011-12 as against the policies issued in the previous financial year 2010-11. In terms of Premium Income generated through sale of new policies, the decline during the Financial Year 2011-12 was 14.01%. The decline in the number of policies sold may be attributed to IRDA’s bringing out new Regulations on the design of ULIP products in the interests of policyholders’ welfare and general market conditions prevailing in the country.

The Government has reviewed the performance of life insurance industry with the insurance companies and the Regulator. In order to give a boost to the life insurance industry, certain measures have been identified for action which include taxation benefits and regulatory issues relating to product design, distribution and investment.

This was stated by the Minister of State for Finance, Shri Namo Narain Meena in a written reply to a question in the Lok Sabha today.

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DSM/RS/ka

Insurance regulation changes and market conditions linked to falling life policy sales; government to consider tax and regulatory relief. The insurance regulator reported a decline in new life insurance policies and premium income, attributing the fall to market conditions and new regulations on Unit Linked Insurance Plan design. The Government reviewed industry performance with insurers and the regulator and identified remedial measures focused on taxation benefits and regulatory reforms concerning product design, distribution and investment rules to support the life insurance sector.