IRDAI has toughened the regulations for insurance intermediaries like agents and brokers to sell ULIPs. In fact, from December 1, 2019, insurance agents will have to become eligible to sell market-linked products like ULIPs.
In its latest circular, IRDAI has clarified that insurance agents will have to attend an additional training session apart from mandatory hour trainings to become eligible to sell ULIPs. Such a training session has to be conducted on continuous basis. The market regulator has asked insurance companies to maintain a list of agents who have undergone this specific training.
This training would cover topics like development of capital markets, basic knowledge and concept of ULIPs, suitable market segments and so on.
Agents selling ULIPs will also need to ensure that their clients understand risks related to ULIPs. Agents will be required to disclose development in other market-linked products like mutual funds.
Also, the insurance companies will have to disclose the commission in absolute terms paid to agents in ULIPs.