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.
ALSO READ – Govt raises premium for flagship insurance schemes PMJJBY, PMSBY
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.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.