The contradiction is telling. India’s youngest regulator in the financial services space, Insurance Regulatory and Development Authority (IRDA), born on April 19, 2000, in the age of transparency has been and continues to encourage opacity. It seems more concerned about the business and profits of insurance companies than in protecting consumers. Its actions seem more embedded in the second part of its mission statement (“promote and ensure orderly growth of the insurance industry”) than in the first: “To protect the interests of the policyholders.”

Titled “ULIP Products”, its August 18, 2007, rambling press release reflects this irony. The first para notes, “IRDA is keen to ensure that unit linked products are transparent and that customers (SIC) from every walk of life can compare features and charges across products and across companies.” Great — the regulator has finally woken up to the loot that has been happening in the garb of insurance over the past two to three years, and which we have been regularly highlighting.

(For those who came in late, you need to be an accountant, lawyer and a finance whiz in order to decode the fees, expenses, costs, charges (FECC) and all other old fangled jargon that the industry uses to grab as much as 60 per cent of a household’s first year premium. While this would seem not only prohibitive but absolutely unacceptable to us who pay, particularly when agents encourage a policy churn after the first three high-cost years are over, IRDA seems to have no objections.)

... contd.