Customers will no longer get insurance covers bundled with mutual funds and many savings and investment products offered by banks. They may, however, continue to get insurance with credit cards and home loans.
After a recent dispute with mutual fund companies, which wanted to collect insurance premium by hawking policies along with their schemes, life insurers on Thursday decided to end the system of bundling on a host of financial products.
The decision taken by the Life Insurance Council, a self-regulatory body, is significant since some of its members have a common parentage with asset management companies.
At present, Reliance Mutual Fund and Birla Sun Life Mutual Fund, which were offering systematic investment plan (SIP) products with insurance policies, will stop offering the cover.
Insurance Regulatory & Development Authority (Irda) had also said fund houses desiring to sell insurance products should get a licence from Irda.
