Page 10 - The Insurance Times January 2022

LIC of India

News

LIC can hike Kotak stake to not have a demat account yet could anteed benefits. The benefits include a
open one and link PAN to their policies periodic return of the basic sum insured
10%: RBI
under this facility to apply in the IPO plus the entire sum assured upon matu-
The RBI has allowed LIC to hike its stake under this category. rity. The corporation has said that this
in Kotak Mahindra Bank to up to 9.99% policy is also allowed for the third-
The government is eyeing around Rs. 1
from the current 4.96%. Kotak lakh crore by divesting part of its stake gender.
Mahindra Bank's shares rose 3% follow-
in the life insurance major through the The policy is a non-participating, non-
ing the announcement. linked individual savings plan, which en-
IPO, expected in the next few months.
The RBI's permission comes in the wake This is sure to be the largest IPO in In- ables the corporation to offer assured
of the central bank finalising new norms dia, far ahead of the recently closed benefits. Guaranteed additions accrue
on ownership of private banks where it PayTM offer that was worth about Rs at the end of each policy year starting
clarified that non-promoters would be 18,300 crore, official data showed. from the sixth policy year to the end of
allowed to hold up to 10% for individu- Earlier this year, the government its term. The life cover is 125% of basic
als and non-financial institutions. Ana- sum insured for single premium policies
amended the LIC Act, 1956 to allow the
lysts feel that this is an enabling provi- while for limited period premium pay-
company to offer shares to its policy-
sion to ensure that the insurance giant ment, the cover is 125% of sum assured
holders when it goes for an IPO. Through or seven times the annualised premium,
is not in breach of norms.
an advertisement, LIC also informed its whichever is higher.
The RBI requires prior permission be- policyholder7ns surge, NPAs fall ahead
fore investors buy more than 5% stake of IPO For single premium death sum assured is
in a bank. At current levels, LIC was very Life Insurance Corporation (LIC) of In- 125% of basic sum assured plus guaran-
close to the 5% limit. In an exchange dia has provided heavily against its debt teed additions. For limited payment pre-
filing, Kotak Mahindra Bank said that it portfolio and managed to bring down mium, death sum assured is 125% of ba-
has received an intimation from LIC of its net non-performing assets (NPAs), as sic sum Assured or seven times of
annualised premium, whichever is higher.
the approval, which is valid for a year. well as gross NPAs, in 2020-21 (FY21).
The corporation has made provisions to There is a provision to receive maturity
Link PAN to LIC policies for the tune of Rs 37,341.6 crore, of which and death benefit in installments over
5 years instead of lump sum. The mini-
IPO quota Rs 34,934.97 crore is towards doubt- mum sum assured under this plan is Rs
ful, sub-standard, and loss assets.
Life insurance major LIC has asked its 2 lakh and no limit for maximum sum
policyholders who also have a demat LIC launches new plan, assured. The minimum age at entry
account to link their income tax PAN ranges from 90 days to 8 years accord-
with their policies so that they can ap- Dhan Rekha ing to chosen policy term. The maxi-
ply in its IPO under the reserved cat- LIC has introduced a plan 'Dhan Rekha' mum age at entry ranges from 35 years
egory. Those LIC policyholders who do with special rates for women and guar- to 55 years.

10 The Insurance Times, January 2022