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Thursday, July 7, 2011

IRDA guidelines for Life Insurance Companies: Continued

It is learnt that IRDA might be scrapping the requirement which stated that a life insurance company which desires to go public needed to be profitable over the past 3 years. This will come as a relief for companies like ICICI Prudential, HDFC Standard Life and Max New York Life which were otherwise eligible togo for an IPO but struggling on the profitability norm. Life Insurance Companies , operating in a business which is capital intensive, has been struggling to raise capital as the IPO norms have been strict. At the same time, they have also been handicapped by the fact that the FDI norm on Insurance has been capped at 26% and not increased to 49%. On the other hand, IRDA has come down heavily on the charges levied by life insurance companies on their customers (effective Sep 1 2010) which has reduced profitability margins of these organisations


  1. I think these guidelines added further burden to the insurance industry. The government should not be that stiff in implementing regulations that will greatly affect insurance businesses.

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  2. No matter how old you are, you really need to get life insurance. Anything could happen and it is not good to leave your family without anything. Down below there are 10 life insurance companies that are great and have some good deals.

  3. I understand that term policies offer better value, but may result in a significant cost without any return if there is no claim during the term of the policy. Whole life policies, on the other hand, tend to be much more expensive, and may be beyond our budget.