*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
The Insurance Regulatory and Development Authority of India (IRDAI) is of the view that health insurance companies can operate at 33% lesser capital investment than automobile section. This is due to the fact; the health insurance claims are lower as compared to motor insurance claims.
Currently, the capital obligation for establishing an autonomous health insurance company is capped at Rs. 100 crore in the Insurance Bill. However, IRDAI has requested the government to reduce this investment to Rs. 50 crore.
Until recently, the health insurance category was a part of general insurance and insurers launch annual products. Now with an exclusive category, firms can design innovative health insurance products with longer tenure and greater benefits. Currently, there exist five independent health insurance companies, and the latest entrant is Birla MMI.
With the amended foreign direct investment (FDI) bill-a 49% increase in the investment limit, the insurance companies expect improvement and expansion of their products. Moreover, the health insurance committee is working out the product details for health savings accounts.
The officials at IRDAI have deployed risk-based capital method for evaluating solvency margins for establishing autonomic health insurance firms, and discovered that only 100% of liabilities, excluding assets are needed to create solvency- and this is lower than the150% margin as per the industry standards. Now there will be different statistical figures for commission rates and for management expenses in the stand-alone health insurance sector.
Health insurance is today a rapidly emerging sector of general insurance industry, a 20% increase in the premium holdings has been reported in 2014-15 as compared to 9% for the broader pie. Subsequently, global insurers like Aetna (U.S.) and Discovery (South Africa) have been exploring JV options for launching their health insurance subsidiaries in India.
Source: This news was published on May 19, 2015 in economictimes.indiatimes.com under the title: “Irda may reduce capital requirement for health insurance ventures by 33%”