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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY - page 91 / 228

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ANNUAL REPORT 2007-08

LIC), the Regulations provided that the quantum of insurance business to be done in the rural and social sectors shall not be less than what was recorded by them for the accounting

year ended 31st

March, 2002.

Based on the amendment

regulations notified by the Authority, the Obligations of these insurers towards the rural and social sectors for the financial year 2007-08 to the financial year 2009-10 are as under:

  • (I)

    Life Insurance Corporation of India (LIC):

  • (a)

    Rural Sector Obligations:

(ii)

5.50 lakh lives whichever is higher.

The obligations of the insurers shall undergo an increase of ten percent in each of the financial years 2008-09 and 2009- 10, over the number of persons actually covered in the financial year 2007-08.

In addition, with a view to giving fillip to micro insurance and to aligning the rural and social sector obligations with the micro insurance regulations the manner of compliance has been linked to the micro insurance regulations.

  • (i)

    Financial year 2007-08: twenty four per cent

  • (ii)

    Financial years 2008-09 and 2009-10: twenty five per

cent of the total policies written direct in that year.

(b) Social Sector Obligations:

Twenty lakh lives should be covered for the years 2007-08 to 2009-10.

  • (II)

    Non life insurers:

    • (a)

      Rural Sector Obligations:

  • (i)

    Financial year 2007-08: six per cent

  • (ii)

    Financial year 2008-09 and 2009-10: seven per cent of the total gross premium income written direct in that year.

    • (b)

      Social Sector Obligations:

For the financial year 2007-08:

(i)

the average of the number of lives covered by the respective insurer in the social sector from the financial years 2002-03 to 2004-05 or

Further, in order to provide time to insurance companies to establish operations to enable them to comply with their obligations towards the rural and social sectors, amendments have been made to the Regulations. It has been provided that in cases where an insurance company commences operations in the second half of the financial year and is in operations for less than six months as at 31st March of the relevant financial year, (i) no rural or social sector obligations shall be applicable for the said period, and (ii) the annual obligations as indicated in the Regulations shall be reckoned from the next financial year which shall be considered as the first year of operations for the purpose of compliance. In cases where an insurance company commences operations in the first half of the financial year, the applicable obligations for the first year shall be 50 per cent of the obligations as specified in these Regulations.

q) Exercising such other powers as may be prescribed

The Central Government did not prescribe any powers to the Authority and consequently Authority did not exercise any powers.

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