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To All the Life Insurers
Ref. No: IRDA/LIFE/GDL/GLD/222/11/2016 Date: 09-11-2016
Guidelines on Point of Sales (POS) –Life Insurance Products
Background:
 
Reference is drawn to Sections II (d) and V(1) of Guidelines on Point of Sales Person- Life insurance, dated November 7, 2016 which mention the Point of Sales - Life Insurance Products.
 
Consequently the Authority, in order to give an added fillip in providing easy access to Life insurance Products to people at large and to enhance insurance penetration and density as part of its Development agenda, having considered the feedback received from the stakeholders to the Exposure draft dated March 23, 2016 on  the subject, issues the following ‘Guidelines on Point of Sales – Life Insurance Products’ by exercising the powers vested with the Authority under Sections 14 (1), 14(2) (c) & 14 (2) (e) of IRDA Act -1999.
 
Scope and Applicability of these Guidelines:
 
These Guidelines shall be applicable to the products offered by Life Insurers proposed to be sold through “Point of Sales Persons”.
 
1.            Definition:“Point of Sales (POS) Product” means the simple plain vanilla type of product wherein each and every benefit is predefined and disclosed upfront clearly at the time of Sale itself and is very simple to understand.
 
2.            Categories of POS Products:
 
(i)            The Category / Nature of Products offered under POS - Life Insurance shall be as given hereunder:
a.     Pure Term Insurance Product with or without return of premium
b.    Non-linked Non-Participating Endowment Product (Money back feature also allowed)
c.     Immediate Annuity Product
d.    Any other product / product category, if permitted by the Authority
 
(ii)          The product names should be prefixed with the words “POS” (POS-Product Name)
 
3.            The parameters   of the aforesaid categories of products mentioned in point No. 1 above shall be as shown in Annexure –I.
 
4.            The condition/eligibility/parameters mentioned in the Annexure –I for different categories of POS Products are given as lower/upper   limits   within which the Insurer has the flexibility to design the product. 
 
 
 
5.    Solicitation and marketing of these products is allowed to be done through
 
a.    Point of Sales Persons – Life insurance
b.    Individual Agents of the Life Insurer
c.    Intermediaries authorized to solicit life insurance products
d.    Insurer directly
 
6.    Life Insurers shall offer these products only as Non-Linked and Individual insurance products.
 
7.    Unless explicitly exemptedin these guidelines / Annexure-I, the extant Regulatory provisions shall be applicable mutatis mutandis to these products.
 
8.    The CEO and the AA shall attach a certificate of compliance to these guidelines along with product filing.
 
9.    Any existing Product, may be sold asPOS Product, subject to modification to comply with theseguidelines and approval of the Authority.
 
10. ‘Key Features Document (KFD)–cum -- Proposal Form’ Format :
 
(i)            There would be two parts of the ‘Key Features Document cum Proposal Form’, where the first part would be the KFD and second part would be the Proposal Form. Both the parts are joined by perforation so thatthe first part (KFD) can be easily separated and given to the proposer/ Life Assured for his/ her record and the second part (Proposal Form) is to be preserved by the insurer / representative for necessary processing.
 
(ii)          Key Features Document(KFD) must contain all thekey benefits under the plan including (a) Sum Assured on Death (b) Maturity Benefit(c) SurrenderValue (d) Paid Up Value, if any (e) Exclusions (f) Registered name and address of the life insurer with logo etc.
 
11.Every “Key Features Document cum Proposal form” should contain unique reference number on both parts.
 
12.The TAT for issuance of policy / acceptance of Risk and communication of Acceptance or otherwisemessage to the customer of such policy would not be more two working days (excluding holidays) from the date of collection of proposal at the point of sale.
 
13.If the Proposal is not accepted for any reason whatsoever, the refund of payment bedone to the Proposer / Life Assured within 7 days from the date ofdecision.
 
14.The insurers shall submit the returns on half-yearly basis as prescribed in the Annexure-II.
 
 
 
Nilesh Sathe
Member (Life)
 
ANNEXURE - I
 
(a) PureTermInsuranceproductwithorwithoutReturn of Premium
 
Product Features/ Parameters / Eligibility:
 
Minimum Age at entry
18 Yrs.
Maximum Age at  Maturity :
65 Yrs.
Policy Term
Min – 5 years , Max  - As proposed in F&U Application
Sum Assured on Death :
 
 
Minimum – As proposed in F&U
Maximum – 25 Lakhs (excluding ADB Rider)
( Sum Assured would be in the multiple of Rs 50000 only )
Grace period
As per extant regulatory norms
Revival period
As per extant regulatory norms
Waiting Period
( for other than Accidental death only ) 
 Allowed up to maximum period of first 90 Days
from the date of acceptance of risk
 
Death Benefit { Other than Accidental } : If death takes place
 
a.    During waiting Period ( if any )
 
b.    After expiry of waiting Period
 
 
 
 
100% of Premium paid
 
 
Sum Assured on Death
Accidental Death Benefit :
 
Equal to ‘ Sum Assured on Death ’ No waiting period is applicable.
 
Maturity benefits
( Without Return of Premium )
Nil
Maturity Benefits
( With Return of premium )
At least 100%of Premium Paid.
Underwriting Conditions
Only Non-Medical underwriting
Surrender Value
As per extant regulatory provisions
 
 
 
 
Accidental Death Benefit
( in built )
Inbuilt ADB onlyallowed
Commission
For the POSPs engaged by Intermediaries no commission is payable by the Insurer.
 
For the POSPs engaged directly by the Insurer, as proposed in the product F&U and approved by Authority as applicable to individual agents.
Max Sum Assured limit
 on a single life
25 Lakhs ( excluding ADB ) at Insurer level (per Insurer)
Other Features / Conditions 
As per extant regulatory provisions
 

 
(b) Non-linked ,Non-Participating Endowment product
 
Product Features/ Parameters / Eligibility :
 
Maximum Age at Maturity :
 65 Yrs.  
Policy Term
Min – 5 years , Max  -20 years
Sum Assured on Death :
Maximum – 10 Lakhs ( excluding ADB )
 
Sum Assured on Maturity:
 
 
Guaranteed Maturity Benefitin absolute amount.
Grace period
As per extant regulatory provisions
Revival period
As per extant regulatory provisions
Death Benefit
{ Other than Accidental } : If death takes place
 
i.              During waiting Period ( if any )
 
ii.            After expiry of waiting Period
 
 
 
 
 
-          100% of Premium Paid
 
 
 
-          Sum Assured on Death
Accidental Death Benefit
 
Equal to ‘Sum Assured on Death ’ No waiting period is applicable.
Maturity benefit
Guaranteed Maturity Benefit in absolute amount
Surrender Value
 
 
 
As per extant Regulatory Provisions
 
 
Waiting Period
(Other than Accidental death only ) 
Allowed up to maximum period of first 90 Days from the date of acceptance of risk
 
 
Accidental Death Benefit 
Only Inbuilt ADB allowed
Loan facility, if any
Allowed
Commission
For the POSPs engaged by Intermediaries no commission is payable by the Insurer.
 
For the POSPs engaged directly by the Insurer, as proposed in the product F&U and approved by Authority as applicable to individual agents.
Underwriting Conditions
 Only Non-Medical underwriting
Maximum Sum Assured Limit on a single life
10 Lakhs( excluding ADB ) at insurer level ( per insurer)
 
 
Other Features
As per extant Regulatory provisions
 
 

(c )Immediate Annuity Product
 
Product Features/ Parameters / Eligibility :
 
Type of Immediate Annuity
 
Only  ‘ Life Annuity with Return of Purchase Priceon death ’  allowed.
Min / Maximum Age at Entry:
Min - 40 years
Max – 70 years
Mode of Premium
Single Premium only
Maximum Premium:
No Limit
Minimum Annuity
As per extant Regulation.
Death benefit
Return of Purchase Price
Commission
For the POSPs engaged by Intermediaries no commission is payable by the Insurer.
 
For the POSPs engaged directly by the Insurer, as proposed in the product F&U and approved by Authority as applicable to individual agents.
Other Features
As per extant Regulatory provisions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annexure II
 
Half Yearly Return in respect of POSLife Products Business           
 
Due date of the return:15thOctober(for April- Sept)and 15th May (for Oct - March) every year. 
 
During the half-yearly period/ Cumulative details during the Year *:
 
Name of the product:
 
Distribution Channel**:
 
Details of the business
State 1 ***
State 2 so on
Total no of policies issued
 
 
Total premium collected
 
 
Total commission paid
 
 
Total service charges paid
 
 
Total no of policies discontinued
{ Non- single } after the grace period
 
 
Total no of policies revived during the period
Total no of policies surrendered
Total No and amount  of claims incurred
 
 
Total No and amount of claims settled
 
 
Total  No and amount of claims outstanding
 
 
 
Total No and amount of claims rejected
 
 
 
Total in force at the end of the Half yearly period
Total No of the grievances registered
 
 
 
*The details shall be given for the half year and for the year also separately.
** The details shall be given for each distribution channel separately
*** The details shall be given for each State separately. 
 
 
Signature of the AA                                                             Signature of the CEO
Date:  
Insurance Regulatory and Development Authority of India. All Right Reserved.