In a significant measure Insurance Regulatory & Developmentv Authority (Irda) has asked the nomber two private sector life insurance company, Bajaj Allianz Life Insurnace to withdraw on of its unit linked insurnace plans (Ulips) profitable product Capital Unit Gain.The company had launched the product last year and mobilised quite a chunk of premium by selling this product which had given return of more than 50 % in one year.
The insurance regulator has said that the product of Bajaj Allianz Life Insurnace which falls under acturial funded product is complicated one and is not customer friendly. Irda has asked the Pune based life insurer to withdraw the product in 15 days, Earlier Irda had formed a committee to review the fundamental of the these actuarial funded products of the life insurers.
Speaking to the FE Sam Ghosh, managing director & CEO, Bajaj Allianz Insurnace confirmed the the communication from the Irda on Thursday. Sources point out that Capital Unit Gain Product had helped the Bajaj Allianz Life Insurance to record profit in short span of time and other competitors had compalined to the Irda on this.
After reviewing the Bajaj Allianz Life Insurance’s Capital Unit Linked Product the regulator had asked the company to withdraw it. However Bajaj Allianz Life Insurnace had taken the mandatory approval of the insurnace regulator before launching the product. Another private sector life insurer Aviva has five actuarial funded products launched over last five years. However Irda has not found any fault with theser products. According to an Aviva's spokersperson, the regulator has not found any problem in the company's products and the copmpany would continue selling these products.
Sources point out that the most of the profit of the Bajaj Allianz Life Insurance (Rs 30 crore in the Q1 2007-08 and Rs 60 crore in 2006-07) had been generated through proper expense management.