New Delhi [India], June 13 : HDFC Life Insurance Company anticipates an impact of approximately 100 basis points (on a gross basis) on the company's New Business Margin (NBM) after the insurance regulator IRDAI recently maintained surrender value on early exits by policyholders.
However, the private insurer informed stock exchanges on Thursday that it was confident of mitigating this impact.
"...we are confident in our ability to largely mitigate this impact without compromising the value proposition for our customers," the insurer said in an exchange filing
The regulator Insurance Regulatory and Development Authority has come out with final regulations on surrender value to be paid by life insurance companies to policy holders in instances of early surrenders of life insurance policies. Life insurers would pay 78 per cent of total premium received as surrender value to policyholders.
In order to simplify the insurance landscape, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced major reforms in motor, health and home insurance segments. The new set of reforms has introduced Customer Information Sheet (CIS) to provide clear and concise policy details including scope of coverage, exclusions, warranties, and claim settlement processes.
On Tuesday, IRDAI has issued a comprehensive Master Circular on General Insurance Business.
"We expect these measures to positively impact the long-term growth prospects for the Industry," HDFC Life said.
HDFC Life welcomed the IRDAI's reforms outlined in the Master Circular on Life Insurance products.
It said measures such as a simplified Customer Information Sheet, training programs, mandatory policy loans to enhance liquidity, introduction of variable annuities, extended free look period, robust processes to address customer grievances and higher value to customers on early exits should further the Regulator's vision of insurance for all by 2047.
Established in 2000, HDFC Life Insurance Company Limited ('HDFC Life'/ 'Company') is a listed, life insurance solutions provider in India, offering individual and group insurance solutions.
"We are confident these reforms will significantly strengthen the life insurance proposition in India, making it simpler, more transparent, and ultimately more attractive to prospective customers," HDFC Life's exchange filing read.
The master circular for life insurance companies will be effective from September 30, 2024.
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