Foiling its pension counterpart PFRDA's - Pension Fund Regulatory Development Authority - attempt of engaging insurers in the distribution of the New Pension System (NPS), the Insurance Regulatory and Development Authority (IRDA), in a Monday circular, told all insurance companies to refrain from acting as a point of presence for NPS.

Previously, there were 22 PFRDA-appointed entities - including big banks like Allahabad Bank, Axis Bank and SBI affiliates; finance companies; and mutual funds - as points of presence for NPS, to facilitate transactions through branches of these entities.

Even the Life Insurance Corporation and Bajaj Allianz had been appointed as points of presence by PFRDA. Though the LIC still features in the list that has been the revised by IRDA, Bajaj Allianz's proposal has been turned down.

As per the IRDA circular, the only way in which the insurance companies can partake in pension plan distribution is by setting up a 100 percent ancillary for carrying out the task. The other necessary conditions include that the funds for the ancillary should derived from the promoters of the insurance companies, and the insurance company's accounts should indicate the ancillary as a 'non-admitted asset.'

Clarifying the stipulations, IRDA said: "Under no circumstances would the policyholders' funds be accessed for meeting losses resulting from extraordinary lapses and contingencies."