BackAsk Mint | Irda defines how insurance firms can invest your money
Ask Mint | Irda defines how insurance firms can invest your money
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The insurance business in India isn’t just growing, but also becoming more sophisticated in terms of product offerings. To help readers keep ahead of developments in this business, Mint features a Q&A on insurance every Monday.
I own a small-scale industry and want to know about group pension schemes for my employees. Do life insurance companies offer such a scheme?
An investment of up to Rs1 lakh per annum in group superannuation schemes by employers for each employee is exempt from fringe benefit tax.
I have a policy from the Life Insurance Corp. of India. An agent from a private insurance company has approached me with a unit-linked insurance plan. Before I invest in the new policy, I just wanted to understand how the government ensures that my money is safe with an insurance company.
Most foreign partners in the Indian market are well-established global insurance players with a proven track record in the business. This amply demonstrates their credibility and stability in the business.
All insurance companies in India are regulated by the Insurance Regulatory and Development Authority, or Irda, which has laid down clear criteria defining the manner in which insurance companies can invest your funds. In fact, every insurance company needs to have a minimum paid-up capital of Rs100 crore, which acts as a safety net against the company’s failing.
Further, insurance companies are also required to maintain solvency margins depending on their volume of business. The minimum solvency margin required to be maintained by any insurer is Rs50 crore.
Readers are welcome to write in with their queries to askmint@livemint.com. The questions will be answered by senior executives from leading insurance firms.This week’s expert is Bert Paterson, managing director and CEO, Aviva India.
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