The Insurance Regulatory and Development Authority (Irda) today gave a clean chit to Life Insurance Corporation of India, the largest insurance company in India, in the case of alleged violation of rules pertaining to transfer of profits among its various schemes.
The insurance watchdog earlier said it would launch an investigation in to the books of LIC pertaining 2009-10.
IRDA chairman J Harinarayan said there is no violation committed by the LIC and it was just an actuarial shortage as to the current actuarial estimates.
An investigation done earlier by Irda revealed that there was deficit of around Rs 14,000 crore in one account covering annuity policies that offered high assured returns.
"This is not a real cash shortage. ... They will project the gap between the liabilities and assets assuming a certain pattern of liability and assuming a certain generation of income from the investments made," he told media persons after a function organised by IIRM here.
He said the LIC generates a lot of surplus which technically belong to share holders.
"The LIC is used to meet the shortfall with this cash flow. It is entirely possible in the years to come that this imbalance will be rectified. So, at the moment it is not a cause of concern and these figures are disclosed in their annual account," Harinarayana said.
LIC, in a statement, earlier said the deficit is only a notional actuarially estimated figure for a period of over 20 years and it is different from a financial deficit or an investment loss.
Replying to a query, he said the IPO draft guidelines for non-life insurance companies have been sent to Sebi for comments.
"As far as life insurance companies are concerned, the guidelines have been cleared by SCADA, a body constituted by Securities and Exchange Board of India and approved by Sebi. We will be bringing out a circular shortly. With regard to non-life companies, we have done the preliminary work and the matter is engaged to the attention of Sebi," the regulator said.
The Institute of Insurance and Risk Management (IIRM), in partnership with ICICI prudential Life, today announced the graduation of its third batch of full time executive program in insurance and risk management program.
