Irda bans life cover with highest NAV guarantee
Insurance Regulatory and Development Authority (Irda) will ban highest net asset value (NAV) guaranteed life insurance products and put out this notification shortly, said J Hari Narayan, chairman, on Monday.
Highest NAV-guaranteed products promise to pay the highest value the fund achieves during a certain period of five or seven years. However, to maintain that NAV consistently, insurers have to take risks by investing in stocks aggressively. This could lead to undue risks. The product had become the largest selling unit-linked life insurance policies after new guidelines came in 2010.