IRDA may scrap highest NAV guaranteed products

The Insurance Regulatory and Development Authority (IRDA) is considering withdrawing highest net asset value (NAV) guaranteed products. 

Highest NAV-guaranteed products assure to pay the highest value the fund achieves during a certain period, say, seven or ten years. The regulator has been expressing concern on such products as insurers have to take risks by investing in stocks to maintain that NAV consistently. 

“Yes, we are considering. We have not really issued any orders but we are actively considering it,” said Mr J. Hari Narayan, chairman, IRDA. 

IRDA expects some slowdown in the insurance industry in 2012-13. “We expect some slowdown. I believe the growth in the insurance industry is closely interlinked with the growth of the economy. If one takes a negative trend the other will follow,” he told newspersons on the sidelines of a seminar on policyholder protection and welfare organised by IRDA here on Saturday. 

shobha@thehindu.co.in