Ulip Investment Caps May Be Eased

The Insurance Regulatory and Development Authority (Irda) likely to permit up to 25 per cent investment to a single group of companies as part of the group exposure norms for unit-linked insurance plans (Ulips). Exposure to a single company or a fund is expected to be capped at 10 per cent of the policyholders fund or the total investment in a particular fund, whichever is less. At present, there are neither single nor group company exposure guidelines for Ulips. The insurance regulator is in the course of working out the exposure norms for Ulip to avoid focus of risk. Ulip is a life insurance product that gives the benefits of protection as well as flexibility in investment, offering higher returns than usual covers. The investment is denoted as units and is represented by the value that it has achieved, called the net asset value (NAV). The idea is to prevent any downside to the policyholders'' investment in such policies that likely to arise from excess investment in one company or a group of companies.