Hyderabad,Feb 25:
Setting the stage for the dividend payment to the government, which intends raise funds from all possible sources,by the state owned insurance companies,the insurance regulator IRDAI has now allowed domestic insurers to declare dividends for FY 2020-21.
Earlier, at the outset of the Covid-19 Pandemic, that had led to the lock down and disruptions in the insurance business in the country, IRDA on April 24, 2020 had issued a circular asking the insurers not to pay any dividend to the shareholders to safeguard their solvencies and liquidity positions.
Considering the revival phase of the economy in general and the insurance industry in particular, and taking into account the solvency position of the insurers, it has been decided to withdraw the applicability of the circular dated 24th April 2020 with immediate effect, said said Pravin Kutumbe, member, Pravin Kutumbe, Member (F&I) IRDAI.
However, insurers are requested to take a conscious call in the matter of declaring dividends for FY 2020-21 considering their capital, solvency and liquidity positions, said Kutumbe.
The IRDAI has been assessing the economic position both at global level and at the Indian context, in general and the insurance sector in particular.
The situation has been assessed based on the financial results of insurers for the quarters ending 30th September, 2020 and 31st December 2020. It is observed that the performance of the insurers in terms of business is gradually reviving, albeit at a slower pace vis-a-vis the pre-covid levels, he explained.