With the aim of enabling insurers' effective capital utilization and raising insurance penetration, the IRDAI has released two exposure documents that propose changes to the non-life and life insurance regulations.
The IRDAI (Actuarial Report and Abstract for Life Insurance Business) Regulations, 2016 and the IRDAI (Assets, Liabilities and Solvency Margin of General Insurance Business) (First Amendment) Regulations, 2016 are the regulations that will be altered.
Non-life insurers
According to a statement from the IRDAI, the proposed revisions will improve insurance penetration in the crop insurance industry in addition to helping non-life insurers use capital more effectively.
The following changes are being considered:
Amounts due for premiums on State/Central Government-sponsored programs that are not collected within 365 days are to be placed with a value of zero for crop insurance company.
b. The Required Solvency Margin (RSM) factor for crop insurance company is reduced to 0.50 from factor A and factor B.
insurers of life
According to the IRDAI, the following adjustments are being considered for life insurance:
a. The second factor used to determine the Required Solvency Margin (RSM) for PMJJBY is now 0.05%.
A government-backed life insurance program in India with a coverage amount of INR200,000 ($2,420) that is accessible for a one-year period and renewable annually is known as the PMJJBY, or Pradhan Mantri Jeevan Jyoti Bima Yojana. All bank account holders between the ages of 18 and 50 are eligible.
b. The first component used to determine the Required Solvency Margin (RSM) for Linked Business (Without Guarantees) has been decreased to 0.60%.
According to the IRDAI, stakeholders and the general public must submit their opinions or comments on the exposure drafts by 11 November 2022.
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