IRDA mulls capping traditional products

After putting caps on Ulip products which have already been effective since Jan 01, 2010, Insurance-regulator Insurance Regulatory Development Authority (IRDA) has been considering putting caps on traditional products too. Though the majority of investments are coming in ulip category in last one-year, traditional products always become the first time insurance product for any investors. IRDA would be waiting for sometime to see how the cap on ulips affects its returns in long-term. Moreover, IRDA has also assured to unveil the listing guidelines for insurance companies. Currently, in a joint venture, foreign partner can hold a maximum of 26 per cent with remaining 74 per cent to its Indian partner. So, companies are finding it difficult to raise money to maintain the solvency margin in capital intensive insurance industry, some of the companies have expressed desire to relax the rules to list insurance companies on bourses. Currently, all the insurance companies expressing desire to list must have run for a minimum period of 10 years.