Chennai, Aug 24 (Calcutta Tube) Bangalore-based ING Vysya Life Insurance Company will increase its equity base by Rs.227 crore this fiscal and is awaiting the sectoral regulator’s sanction for four new products, a company official said Tuesday.
‘The shareholders will be infusing Rs.227 crore additional equity towards meeting the solvency norms and expansion of distribution network. The current equity capital is Rs.1200 crore,’ Director Sales (Tied Agency) T.K. Uthappa told reporters here.
He said the company has filed four new unit linked insurance plans (ULIP) with Insurance Regulatory and Development Authority (IRDA) as the current set of ULIPs cannot be sold from Sept 1 onwards.
The IRDA has asked life insurers to change their Ulips in sync with its revised guidelines issued by it. Only those products that meet the revised guidelines in terms of risk coverage, expenses charged and other stipulations can be sold from next month onwards. The last date for selling old Ulips is Aug 31.
About the likely impact the new ULIP guidelines that will have on the life insurers, Uthappa said: ‘The average premium per policy (APPP) will come down for the life insurers in general. The insurers will focus on non-ULIP or traditional products at least in the short term.’
Citing ING Vysya Life’s premium mix – 56 percent from traditional products and 44 percent from ULIPs- Uthappa said: ‘For the past one and a half years we have been pushing our agents to sell more traditional products. We will not be majorly affected by the new ULIP norms though the APPP will come down slightly.’
Earlier, he launched a child policy- ING Aashirvad- built on a traditional platform. A policyholder/parent can save for his child’s future requirements by guaranteeing the maturity benefit at the start of the plan.
In case of death of the parent, the policy will offer an additional amount equity to 50 percent of the guaranteed maturity as death benefit and the policy will continue with the future premiums being waived off. On maturity, the child shall get the full maturity value of the policy.
After the maturity payout is done, the policy will provide life insurance cover to the child (now an adult) without any additional premium for a value equal to 50 percent of the maturity value.
He said the company earns nearly 25 percent of its premium from selling children policies.
For the current fiscal, ING Vysya Life hopes to earn a total premium of Rs.2,000 crore – new business Rs.1,200 crore and Rs.800 crore of renewal premium.