In a circular dated on June 19, 2024, the Insurance Regulatory and Development Authority of India (IRDAI) barred insurers from investment products if they linked advertising units or index-linked products. IRDAI issued this circular to the insurance companies directly. The company should follow detailed guidelines when they advertise insurance products.

It was stated that the insurers shouldn’t advertise services which are not related to insurance when it comes to general insurance products; they are not supposed to compare the rates, or the discounts to one-time tariff rates. The insurers also have to detail the associated risks when they highlight the potential benefits of an insurance product, the circular mentions.

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Besides, the insurer has to reveal the complete benefits of the insurance but not to exaggerate the same. They should not provide malicious information or defamatory remarks about the competitor by tarnishing their reputation. The advertisement should contain the index-linked product and annuity products with unsettled annuity payout options having credible and authentic information, it adds.

According to the circular, insurers are advised to provide sufficient information following a factual picture of the risk involved in the plan and the risk factor associated with investment returns and its fluctuations. They should give a clear picture of the charges related to the fund or the premium paid and the possibility of a hike in charges. In other promotional materials like benefit illustrations, and sales brochures, the related figures shall only be given as regard to the past performance of the funds in advertisements. For the previous five calendar years compounding annual returns were expressed close to 0.1 percentage.

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If there is no data available for the last five calendar years they should show as many as years possible. The circular advised to include or state that the past performance shouldn’t give expectations on future performance and to indicate the risk on it. The plan should be only in the name of the Life  Insurance Company which is linked to the insurance contract which cease to indicate the quality of the contract, its returns or prospects.