The Insurance Regulatory and Development Authority of India (Irdai) has reduced the capital required to be held by insurance companies offering Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) by almost 50 per cent to enable insurers to offer more policies under the scheme, and provide financial security to bottom of the pyramid of Indian population.
“In order to facilitate more participation of insurers in PMJJBY, Irdai has reduced the capital required to be held by insurers offering PMJJBY, by almost 50 per cent”, the insurance regulator said in a statement on Friday.
PMJJBY provides life insurance cover worth Rs 2 lakh to all account holders aged 18-50 years.
This move by the insurance regulator comes after the Centre increased the premium rates for PMJJBY and Pradhan Mantri Suraksha Bima Yojana (PMSBY), for the first time in seven years due to “long-standing adverse claims experience”, and to make them economically viable. The premium for PMJJBY would increase from Rs 330 to Rs 436 a year effective June 1, and the PMSBY premium would rise from Rs 12 to Rs 20.
This step by Irdai will supplement the recent revision of premium rates by the government of India for the two flagship schemes – PMJJBY and PMSBY — to make these schemes economically viable.
“The easing of capital requirements by Irdai will accelerate the penetration of life insurance in India, and will support the life insurers in achieving the target set by the Government”, Irdai said.