IRDAI advised insurers for prudent management of financial resources of the insurers

Apr 14, 2020 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Insurance Regulatory and Development Authority of India (IRDAI) on April 13, 2020, advises insurers for management of financial resources of insurers to protect the interests of policyholders and provide necessary financial security to them. The spread of Covid-19 in the country and 21-day nationwide lockdown from 25 March 2020 to 14 April 2020 and further extension of lockdown by several State Governments has adversely affected various sectors of the economy. IRDAI had already announced several relaxations to prevent any disruption to the activities of the insurance industry to support the financial sector in its activities.

In furtherance to that, the Authority advises all insurers to take following steps:

a) Board of insurers are advised to critically examine their capital availability and solvency margin as required in the current financial year 2020-21 and devise strategies to ensure that they have adequate capital and resources available with them; 

b) To align the dividend pay-out for the FY 2019-20 so as to be in conformity with the strategy at (i) above; and 

c) Rationalize the expenses of management for the FY 2020-21

[Circular No. IRDA/F&A/CIR/MISC/089/04/2020]


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