Keeping in mind the impact of coronavirus pandemic on insurance business, IRDAI has urged insurance companies to observe ‘dividend payout holiday’ this fiscal. With this, insurance companies can decide if they want to pay dividend to their policyholders.
IRDAI has urged insurance companies not to pay dividend to policyholders and conserve capital in the best of interests of policyholders. In a circular, IRDAI said, “In view of the emerging market conditions and to conserve capital with the insurance companies in the interests of the policyholders and of the economy at large, insurers are urged to take a conscious call to refrain from dividend pay-outs from profits pertaining to the financial year ending March 31, 2020, till further instructions.”
IRDAI will revisit its recommendation after the end of second of quarter of FY 2020-21. The insurance regulator would consider financial results of insurance companies before taking further decision.
Most life insurance companies share their annual profit with policyholders and promoters in the form of dividend and bonus.
