Insurance regulator IRDAI has relaxed capital requirement norms for insurers offering Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).
The capital required to be held by insurers offering PMJJBY has been reduced by almost 50%. The move will encourage more participation of insurers in the scheme and provide financial security to bottom of the pyramid of Indian population through life insurance.
The easing of the capital requirement will accelerate penetration of life insurance in the country and support life insurers achieve the target set by the government, the Insurance Regulatory and Development Authority of India said in a release.
The step will supplement the recent revision of premium rates by Centre for the two flagship schemes — PMJJBY and Pradhan Mantri Suraksha Bima Yojana — to make them economically viable.
Announcing that the premium of PMJJBY and PMSBY were being revised for the first time since the schemes were launched in 2015, the Union Finance Ministry last month said the new rates would come into effect from June 1. The revision was being undertaken in view of the long-standing adverse claims experience of the schemes and to make them economically viable. The rates have been revised by making it ₹1.25 per day premium for both the schemes – translating into an annual increase from ₹330 to ₹436 under PMJJBY and from ₹12 to ₹20 form PMSBY.
Number of active subscribers under PMJJBY and PMSBY as on March 31, 2022 stood at are 6.4 crore and 22 crore respectively. Upto last fiscal, an amount of ₹9,737 crore has been collected towards premium by the implementing insurers and claims of ₹14,144 crore paid under PMJJBY; and ₹1,134 crore collected towards premium and claims of ₹2,513 crore paid under PMSBY.
The revision in the premium would also encourage other private insurers to come on board for implementing the schemes, thereby increasing the saturation of the schemes amongst the eligible target population, especially those who are underserved or unserved population of India, the Ministry said.
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