LIC, pvt insurers to be treated equally on equity cap: Irda
Controlled fund is the total corpus of traditional policies and policyholder funds held by an insurer. “There are a few companies where we have an exposure above 15% but so far, we have not received any official communication from the regulator to bring it down,” said Sushobhan Sarkar, managing director, LIC.
However, the move to raise the investment ceiling, is not expected to benefit majority of insurers in the market. Sarkar said LIC’s controlled fund stands above R13 lakh crore. In comparison, HDFC Standard Life has controlled fund worth R9,000 crore as on January 31, said Amitabh Chaudhry, managing director and chief executive officer.
The corpus of life insurance firms is estimated at R16 lakh crore. In 2011-12, the total collection of premiums by life insurance companies was R2,87,072 crore as against R2,91,639 crore in the previous year, a drop of 1.5%. Premiums have been sluggish ever since August 2010, when the regulator slashed the commissions that agents could charge on unit-linked insurance plans (Ulips). While earlier the bulk of the premiums — more than 70% — came into ULIPs, that share is now down to 15%. The premiums that were invested in Ulips fell 36% 2011-12 over the previous year.