The Insurance Regulatory and Development Authority (IRDA) have been approached by insurance companies for review of 22 pension products because they fear that they may not be conforming to the IRDA's guidelines pertaining to assured returns.
The IRDA said that 22 revised products were filed by the insurance companies as on date out of which 21 products were filed only in the month of December 2011.
In November 2011, all insurers who sold pension products were asked to disclose in the policy document, the customers' maturity benefits or else withdraw them from January 1st 2012, as per the orders of the Insurance Regulatory and Development Authority (IRDA).
The IRDA guideline says that in case of death of the policy holder, the policy documents must define the assured benefit explicitly. When the insurers filed the revised products, they also sought certain clarifications on the guidelines.
In the event of the death of a policy holder, IRDA clarified that the policy holder's successor shall be entitled to receive a sum equal to the premium paid at the guaranteed rate of return, during the term of the contract.
IRDA also said that at the time of purchase of the policy, the insurer offering pension products should disclose a guarantee of either a non-zero rate of return on premiums paid or an absolute amount.
In India, there are 23 life insurance companies selling pension schemes.