HDFC Standard Life Insurance Company Ltd plans to soon launch a ULIP-based single premium pension product. But the company does not intend to launch any regular premium pension product under the ULIP platform in view of the stringent regulatory regime governing such products, Mr Amitabh Chaudhry, Managing Director and CEO, HSIC, has said.

“We are not going to go in for a regular premium ULIP pension product. We can’t see ourselves managing risk in a reasonable fashion and we will end investing in debt. But we are likely to launch a single premium ULIP-based pension product because I can manage it better as all the premium money will come in one go,” Mr Chaudhry told Business Line here.

HSIC has sought IRDA approval for the single premium ULIP-based pension product, he said, adding that a single premium could help in terms of higher investments in equity besides ensuring enough money was invested in bonds for the guaranteed return.

New norms, a deterrent

Private sector life insurance players, including HSIC, contend that the recent ULIP regulations of the insurance regulator — Insurance Regulatory and Development Authority (IRDA) had killed the market for ULIP-based pension products.

The regulations require guaranteed return to be provided to buyers of ULIP-based pension products. There are also requirements of insurance cover and medical tests, which have affected the market for such products, say private sector life insurance players. “IRDA under its new regulations has basically killed the pension product. ULIP pension product has become a big zero. The way the product has been designed, you will be basically invested in debt in ULIP pension product…But the problem in guarantee element is it eliminates the ability of people to take risk.,” Mr Chaudhry said.

To raise Rs 50-70 cr

Meanwhile, HSIC expects capital infusion of Rs 50-70 crore by its promoters before the end of the current fiscal. So far this fiscal, the shareholders of the company have pumped in Rs 100 crore.

The overall capital infusion this fiscal will be slightly lower than the Rs 170 crore brought in 2009-10, Mr Chaudhry said, adding that the company hopes to break even in 2011-12. The paid-up capital stands at a little over Rs 2,000 crore.

On initial public offering prospects, he said that the shareholders were in no hurry or pressure because the capital requirements are coming down. “The IPO timing will be driven by the valuations and pricing. They (shareholders) are ready to wait. But an IPO is certainly in the radar and figures in board discussions,” Mr Chaudhry said.
Source : The Hindu Business Line