ULIPs Redefined in India
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Case Code: INS055 Case Length: 12 Pages Period: 2011 Pub Date: 2011 Teaching Note: Not Available |
Price: Rs.400 Organization: Insurance Regulatory Development Authority of India Industry: Insurance Countries: India Themes: Government & Economy |
Abstract Case Intro Excerpts
Excerpts
ULIPs in India
The insurance industry originated to cover financial risk against a calamity. The insurer (the insurance company) ensured partial or total compensation against unexpected loss to the insured (customer who bought an insurance policy) or the nominees of the insured...
Mis-Selling and Other Unethical Practices
It was alleged that ULIPs were being pitched as an investment product rather than as a risk shield/life cover policy. It was also reported that the fact that the customer should bear the risk of market swings was not stressed during selling. Insurance agents, in an attempt to capitalize on the investment trends, showed assumed returns quoting the 2004-06 stocks index growth and presented a rosy picture of such growth continuing to be sustained...
SEBI-IRDA Tussle
SEBI, the regulator of the capital market, permitted and monitored Mutual Funds (MFs) and other Collective Investment Schemes (CISs). MFs and CISs were required to be registered with SEBI and to comply with regulations...
New Guidelines for ULIPs
Income tax benefits connected with insurance premium payments caused customers to go in for short-term investment buys without serious intention of adhering to the policy...
Exhibits
Exhibit I: Comparison between Traditional Plans Vs ULIPs
Exhibit II: Sensex and BSE Data During 2004-2007
Exhibit III: SEBI, IRDA arguments on ULIPs
Exhibit IV: ULIPs New Guidelines
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