IRDAI has asked Reliance Health Insurance not to sell health insurance policies to policyholders due to inadequate solvency ratio. The insurance regulator has found that the insurer has failed to meet required solvency margin ratio since June 2019 despite several warnings.
Solvency ratio is a measure of how much the company has in assets versus how much it owes. It helps investors evaluate the company’s ability to meet its obligations.
In fact, IRDAI has instructed the insurer to transfer policyholders’ liabilities along with financial assets to Reliance General Insurance by November 15, 2019. That means, Reliance Health cannot use its assets for any payment other than claim settlement.
In a circular, IRDAI said, “Reliance General has been directed to service the claims of the Reliance Health policyholders promptly and efficiently with effect from 15th November, 2019. IRDAI will be closely monitoring the situation to ensure smooth transfer of the portfolio, settlement of claims and protection of the interest of the policyholders. In so far as policyholders of Reliance Health are concerned, the insurance regulator would like to assure them that all their interests have been adequately protected and all genuine claims will continue to be duly honored.”
