Click to play videoMumbai: After announcing its decision to ban all actuarial funded products from the market, Insurance Regulatory and Development Authority (IRDA) has climbed down from its stand.
The regulator, on Tuesday, issued a press release allowing Bajaj Allianz and Aviva Life permission to continue selling these products till they are able to replace them.
All 14 of Aviva Life's unit linked products will have to be replaced, but the new announcement allows the insurer more time frame to execute the herculean task.
Says MD, Aviva Life, Bert Patterson, "The next step for us is to figure out what this means for Aviva and it's a huge task and when we do that we will go back to the IRDA with the time lines."
Re-structuring products is not the only cause for concern. Actuarial funded products require less capital than other Ulip's and the change in the system might require the company to infuse more capital.
"It is a fact that AF products are less capital intensive. If it does require more capital the shareholders, Dabur and Aviva life will be supportive," says Patterson.
Re-structuring the pricing of an insurance product literally means revamping it entirely. Add that to reprinting all product literature and re-educating the entire sales force on the change and it will be months before Aviva is able to change all 14 products.
(With inputs from Delano D'souza)
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