Mumbai:
The insurance subsidiaries of financially battered Dewan Housing Finance (DHFL)- DHFL Pramerica Life and DHFL General Insurance- don’t have any risks in continuing their ongoing business, said Subhash C Khuntia, Chairman of Insurance Regulatory and Development Authority of India (IRDAI).
"The insurance companies (of DHFL) are safe. I don't see any problem in the insurance companies. We monitor the performance and their solvency is adequate and there is nothing to worry," Khuntia said on the sidelines of centenary year celebration of New India Assurance on Tuesday.
While the parent company DHFL is facing a deep financial crisis, questioning its basic survival, Khuntia said that the both the insurance subsidiaries have adequate solvency.
Insurers are required to hold a solvency of 150 percent at all times.
"There is nothing to worry. Right now they are in a comfortable position," said Khuntia adding that IRDAI as a part of their routine inspection of the insurer's records, did not find any financial constraints for the insurance companies.
Earlier, the Life Insurance Council, the official representative body of the domestic life insurers, had sought advise from the IRDAI about the ongoing crisis in DHFL group and its possible implications on the life insurance company.
The home financier is facing liquidity crisis and has defaulted on debt repayments. The lenders to DHFL are in the process of finding out a resolution plan for the company.The company in a statement to the stock exchanges on July 13 said it is undergoing substantial financial stress since the second half of the financial year.
In the DHFL Pramerica Life, DHFL has a joint venture with Pramerica where the latter holds 49 percent stake.
The DHFL General Insurance is wholly owned by the promoters DHFL.
DHFL posted a loss of Rs 2,224 crore for the quarter-ended March 2019, which was dented by additional provisioning. It was the first quarterly loss reported by the company since its inception.
Earlier while delivering his speech Khuntia said insurance players should use and analyse the data generated by the industry for designing and pricing products that can suit customers need.
He said data analytics is an area which insurance industry can take benefit to serve their customers.
"Insurance industry generate a huge amount of data. If they analyse and make sense of this data then that can be used for pricing of product, gauging the need of customers and also to design products that customers require," Khuntia said while delivering the speech.
Noting that an early lead in this area can be useful, he said insurance companies need to be careful about data security and confidentiality.
Khuntia said IRDAI is going to use regulatory Sandbox to promote new, innovative products and processes.
Khuntia further informed that with the rise in the number of natural catastrophes in the country, IRDAI is looking into the possibility of having a few pilot projects in vulnerable areas to offer property insurance and poor people can be subsidised while paying the premium.
A proper assessment of risks and decide on appropriate products would be taken, he added. The premium strucrure for BPL families could also be subsidised, according to Khuntia.
The IRDAI chief said the regulator would come out from when new life insurance regulations will be implemented. The new regulation that impact the products of the life insurers has already been notified last week.
“This year have reached the historic milestone in New India’s success journey,completing 100 years of successful operations.To reach 100 years in an era where mere survival is a challenge is a remarkable achievement,'' said Atul Sahai, CMD, NIA.
Hundred years ago, the Tata Group under Sir Dorabji Tata set up a multinational insurance company in the business district of Fort in Mumbai. Set up with an authorised capital of Rs 20 crore, the idea was to have an Indian insurance company when the British was ruling the country that carries out all kinds of insurance activities.
It today operates in 28 countries.