Reliance insurance company: Irda has banned the new insurance policy of Anil Ambani-owned Reliance Insurance Company, citing financial crisis.
- IRDA hammer on Reliance Insurance Company
- IRDA bans release of new insurance policy
- Referred to Solvency margin of the company
New Delhi: The Insurance Regulatory and Development Authority of India (IRDA) has barred Anil Ambani’s company Reliance Health Insurance from selling a new insurance policy. The authority has taken this step in view of the company’s poor financial condition. The regulator has also asked Reliance Health Insurance to transfer its entire financial assets including current insurance liabilities to Reliance General Insurance. The claims of existing insurance holders will now be settled by Reliance General Insurance.
The regulator said in an order that the financial position of Reliance Health Insurance is not compatible with the provisions in respect of other liabilities including payment of claims. So in such a situation it is not in the interest of the insured to let him sell health and medical insurance policy. IRDA said in its order that Reliance Health Insurance will stop selling insurance from November 15 and will display it with clarity on its website and all branches.
Reliance Health Insurance Company of Anil Ambani Group is facing capital crisis. The Insurance Regulatory Authority i.e. IRDA believes that from June 2019 Reliance Health Insurance Company has failed to maintain the required solvency margin. The company’s solvency margins are worrying. Explain that the solvency margin is the fund that the insurance company sets aside to set the future claims of the policyholders. It is also seen as a reserve fund.
Currently, IRDA has issued a directive to the company to refuse to sell the new health policy. At the same time, along with financial assets, orders have been given to transfer all their policy holders’ liabilities to Reliance General Insurance Company by 15 November. As of November 15, the company will not be able to use any of its assets for payment except for the claim settlement. Irda says that existing policyholders should not be upset as it seems that the company has enough assets to meet the claim.