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Life insurance companies must pay the fund value to policyholders at the end of the lock-in period when policyholders choose complete withdrawal within the lock-in period or do not choose revival. The Authority issues this clarification because some insurers interpret a previous circular incorrectly and delay the release of funds. The fund value is payable as per the provisions of the IRDA (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010. This circular applies to all life insurance companies.
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[Image omitted. See the official document.]
Circular
Ref No. IRDA/ACT/CIR/ULIP/113/05/2017
Date: 5th May, 2017
To
All CEOs of Life Insurance Companies
Re: IRDA/ACTL/CIR/ULIP/174/08/2016 dated 26.08.2016- Revival Option under discontinued Unit Linked Policies
It has come to the notice of the Authority that few insurers are interpreting the captioned circular in a manner which would delay the release of fund value under discontinued unit linked products even when the policyholders have opted for complete withdrawal within the lock-in period or when no option is exercised.
In view of the above, it is reiterated that when the policyholder opts for complete withdrawal during the lock-in period or does not opt for revival within the lock in period, the fund value should be payable to the policyholders at the end of the lock-in-period as per the provisions of the IRDA (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 and clarifications issued thereon.
This circular is issued in accordance with the powers vested on the Authority under Section 14(2) of the IRDA Act, 1999.
This has approval of the competent Authority.
[Image omitted. See the official document.]
(S P Chakraborty) General Manager (Actuarial)
