New Delhi: The Insurance Regulatory and Development Authority (IRDA) today said it will not tweak its proposed guidelines on Unit-Linked Insurance Products (ULIPs) even as the industry fears that the norms, to be effective from next month, could squeeze their profits in short term, reports PTI.
"We have considered all that (the proposed guidelines) and we do not see any need for worry from the regulations already there. We will have to balance the profits of insurance companies with what is right and proper," IRDA chairman J Hari Narayan told reporters on the sidelines of a Federation of Indian Chambers of Commerce and Industry (FICCI) event here.
The regulator, in June, had come up with new guidelines for ULIPs under which the investments would be locked in for five years, up from three years now.
Also, the agents' commission would be reduced and even if investors opt out earlier, the discontinuance charges will be lower than they were before.
Insurance companies are of the opinion that the capping of surrender charges and the even distribution of charges over the lock-in period of five years will adversely impact the profitability of companies.
When asked whether the profitability of the insurers would be impacted, he said, "I do not think that the performance would be significantly impacted in this fiscal or next fiscal."
He said the insurance companies will have to contain expenses to maintain revenue in the long run.
"The insurance companies require to get back to a much reasonable expense pattern for sustainability. We do not want to spin the industry to a high cost sector," Mr Hari Narayan said.
Educomp Solutions Ltd, an integrated education company, said it bought stake in engineering test preparation institute Vidya Mandir Classes Pvt Ltd for Rs34 crore.
On Wednesday, Educomp shares fell 9.8% to Rs622 on the Bombay Stock Exchange, while the benchmark Sensex ended 0.8% lower to 18,070 points.
Asahi Infrastructure and Projects Ltd has received an order worth Rs10.2 crore under central government scheme for construction related works.
The scope of work includes construction of 544 houses, roads, sewerage system, community centres, pre-primary schools etc for municipal council in Washim district Maharashtra. The project is to be completed within nine months from the date of work order issued.
On Wednesday, Asahi shares gained 4.6% to Re1 on the Bombay Stock Exchange, while the benchmark Sensex ended 0.8% lower to 18,070 points.