After the recent hike in the premium rate, the Insurance Regulatory and Development Authority of India (Irdai) on Friday relaxed capital requirement norms significantly for insurers to encourage their participation in the government’s flagship programme Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).
The regulator has reduced the capital required to be held by insurers offering PMJJBY by almost 50%. This move will enable life insurers to offer more policies under the scheme, and provide financial security to the bottom of the pyramid of the Indian population through life insurance, Irdai said in a statement. 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.
The government has recently hiked the premium rates for the two flagship schemes – PMJJBY and Pradhan Mantri Suraksha Bima Yojana (PMSBY) — to make these schemes economically viable.
The premium rate of PMJJBY has been revised upward to Rs 1.25 per day, translating into an increase from Rs 330 to Rs 436 annually effective June 1. The number of active subscribers enrolled under the PMJJBY was 64 million as of March 31, 2022.
An amount of Rs 9,737 crore has been collected by the implementing insurers towards premium and claims of Rs 14,144 crore have been paid under the PMJJBY as of March 31, 2022.
The PMJJBY offers life insurance cover of Rs 2 lakh in case of death due to any reason to people in the age group of 18-50 years having a bank or post office account, who give their consent to join or enable auto-debit of premium.