The case of the missing billions: Estimating losses to customers due to mis-sold life insurance policies


Monika Halan, Renuka Sane, Susan Thomas


In 2011, regulatory constraints were imposed on the sale of unit linked insurance policies (ULIPs) in India, under the claim that ULIPs had been mis-sold as insurance products. This paper constructs two measures of the loss to customers due to mis-selling of ULIPs. The first is calculated using the value of lapsed policies, and the second uses the persistence of premium payments. The paper uses hand-collected data from the annual reports of the insurance regulator and annual reports of individual insurance companies. Both arrive at similar estimates of around USD 28 billion lost from ULIPs sold between 2004 and 2011.

Citation: The case of the missing billions: Estimating losses to customers due to mis-sold life insurance policies, Monika Halan, Renuka Sane, Susan Thomas. Journal of Economic Policy Reforms, October 2014.

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