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Title: Exposure Draft
Reference No.: --
Date: 21/05/2015
IRDAI (Surrender Value) REGULATIONS, 2015
Re: Surrender Value Regulations
The Government India issued Insurance Laws (Amendment) Ordinance, 2014 and which later was formalised as Insurance Laws (Amendment) Act, 2015 which amended the Insurance Act, 1938 and IRDA Act, 1999.
The Bill empowered the Authority to issue regulations covering various areas and one such area is the acquisition of surrender value of a policy. As per the provisions of Sec 113(1) of the Insurance Laws (Amendment) Act, 2015, “a policy of life insurance shall acquire surrender value as per the norms specified by the regulations”.Further, nothing in these regulations shall to invalidate the contracts entered prior to these regulations coming into force
The aim of this regulation is to prescribe provisions relating to acquisition of surrender value. The product regulations IRDA (Non-Linked Insurance products) Regulations, 2013 and IRDA (Linked Insurance products) Regulations, 2013 notified in the year 2013 covered at length the provisions of the surrender value. Hence, no change is envisaged from both these regulations. As far as the minimum amounts for paid-up value is concerned, the limits existed prior to the amendments in Section 113 are retained and to achieve consistency and fairness, the provisions of the above said regulations are also referred to in this regulations. Hence, no major change from the existing regime is proposed. Further, the majority of the existing 113 provisions have been retained and included in this regulation.
The purpose to retain the framework existed prior to the amendment of the Insurance Act, 1938 is to ensure minimum interruption to the industry at this given time.
Feed back / comments on the proposed draft regulations enclosed herewith are requested to be forwarded to the following email ID within two weeks.
J Meena Kumari
HOD(Actuarial)
