IRDAI’s Directive on ULIP Advertisements:
The Insurance Regulatory and Development Authority of India (IRDAI) has issued a master circular on June 19, mandating that insurance companies cease advertising Unit Linked Insurance Plans (ULIPs) as investment products.
This directive emphasizes that ULIPs, which are linked to the stock market, cannot guarantee fixed returns. IRDAI’s circular explicitly bans promoting unit-linked or index-linked products as investment products.
Prohibition of Non-Insurance Advertisements:
In addition to the ban on ULIP advertisements, IRDAI has issued further guidelines prohibiting insurance companies from advertising non-insurance services. Companies are instructed not to compare old prices with new prices or discounts when launching or re-launching general insurance products.
Policy details, including terms and potential losses, must be clearly communicated to consumers, rather than just highlighting benefits.
Ban on Exaggerated Claims:
Insurance companies must provide clear information about the limitations and conditions of policies and avoid exaggerated claims.
They should not promote partial benefits disproportionately or make derogatory remarks about competitor products.
Clear Communication Requirements:
IRDAI mandates that advertisements for ‘Unit Linked Insurance Products’, ‘Index Linked Products’, or ‘Annuity Products’ include clear information about variable annuity payout options and the potential fluctuations in returns.
If no new information is available for over a year, companies should not use outdated data in their advertisements. If old data is used, it must maintain the same font style and size as previously. Additionally, performance details of the corresponding index must be clearly communicated to consumers.
