India's Insurance Regulatory and Development Authority (IRDA) has released a revised set of proposals on micro insurance products.
The draft recommends that all micro-variable products should have a lock-in period of five years from the date of inception of the policy. It has prohibited the surrender of the micro-insurance product.
The insurance regulator has invited comments on the regulations before 14 February, after which the final regulations will be drafted.
In its draft guideline, IRDA said that partial withdrawals may be permitted from the second policy year, subject to maintenance of a minimum balance equivalent to one annual premium in the policy account, reported Business Line.
Regional rural banks, micro-finance institutions, district cooperative banks, non-governmental organizations, self-help groups, urban cooperative banks, banking correspondents, can distribute the micro-insurance products.
A micro insurance agent would be allowed to work with one life insurance company and one general insurance company.