Page 17 - The Insurance Times August 2022

participating segment and recovery in receive from insurance companies for shares of the company at Rs 558.74 per
the protection business (term policies). selling their policies. equity share, not exceeding Rs 2,000
But growth in ULIPs (unit linked crore in aggregate on a preferential
The move is aimed at pushing
insurance plans) may be soft due to basis to (HDFC), the life insurance
transparency and customer
the market correction. company said in a regulatory filing.
protection. It would also put an end to
misselling of products that have high The insurer said the issuance of shares
Life Insurers seek risk-
commission or rewards. is subject to the approval of the
based solvency regime for Web aggregators may have to come shareholders besides, regulatory/
statutory approvals.
ULIPs up with a specific section for 'insurance
policyholder protection.' "The issue price at which the equity
Some life insurance companies plan to
shares are to be issued to HDFC Ltd is
move IRDAI, seeking a risk-based They will have to disclose the
the higher of the price determined
solvency regime for unit-linked commission rates and rewards that
under the valuation report of the
insurance plans (ULIPs), where the risk they are entitled to receive from
registered valuer and the price
is borne by policyholders. insurance companies for selling their
calculated in accordance with SEBI
If the regulator gives a nod to this products. Reporting of commissions
(Issue of Capital and Disclosure
proposal of the life insurance may also be made mandatory for
Requirements) Regulations," it added.
companies, then the capital blocked for corporate agents and brokers.
ULIPs will come down, which will boost
The IRDAI is considering a proposal Canara HSBC Life Insurance
the solvency margins of insurers and
that seeks to have a single limit for
release capital for other purposes. declares bonus
expenses made by insurance
Currently, the insurers follow a rule- companies. These will include Canara HSBC Life Insurance declares
based solvency regime. As a result, bonus for the 9th consecutive year of
operating expenses, commissions and
insurers' assets are required to be 1.5 INR 78 Cr. for all eligible policyholders
rewards given by insurers.
times, or 150 percent, of their for the financial year 2021- 2022. The
Under the current practive, there is a
liabilities. The minimum solvency ratio life insurance company has been
separate limit for expenses allowed at
insurance companies must maintain is consistently declaring bonuses on
the business level and for operations,
1.5 to lower risks. In terms of solvency participating products. Bonus amount
margin, the required value is 150 per commissions and rewards. The for FY2021-2022 marks 28% of surge as
cent. The solvency margin is the extra proposal is to ensure appropriate compared to the previous year.
capital the companies must hold over market conduct and expense
Commenting on the announcement Mr.
and above the claim amounts they are management by insurance companies.
Anuj Mathur, MD & CEO, Canara HSBC
likely to incur. It acts as a financial
Insurers may also have to disclose Life Insurance, said, "We are elated to
backup in extreme situations, enabling
commission for every policy along with announce the annual bonus for our
the company to settle all claims.
the name of the intermediary. customers and pleased that we are
Once the risk-based solvency regime is progressing each year in fulfilling
implemented, insurance companies million promises of our customers. We
HDFC Life board approves
will have to hold capital in proportion are a very customer centric life
issuance of over 3.5 cr
of the business they write Riskier the insurance brand and constantly thrive
business, higher is the capital
shares to parent HDFC for to provide best services and work for
requirement. the well-being of our customers. We
Rs 2,000 cr
will continue to work harder for our
Online insurance platforms HDFC Life Insurance Company its board customers and ensure that their
has approved the issuance of over 3.5 lifelong goals are taken care of with
may have to disclose
crore equity shares to promoter
proper financial assistance. Our
commission paid company HDFC for Rs 2,000 crore on a customers are true testimony of our
Online platforms such as Policybazaar, preferential basis. The company's board growth journey and our commitment
as well as corporate agents, may have of directors, at a meeting, approved towards their financial goals is
to disclose the commissions they the issuance of 3,57,94,824 equity unparalleled."
The Insurance Times, August 2022 17