LIC to raise solvency margin by Rs 7,000cr

Life Insurance Corporation (LIC) today said it will increase its solvency margin by Rs 7,000 crore to Rs 37,000 crore by 2009.

This step is to meet the assurance of increasing the margin from 130% to 150% in the next two fiscals that the company had made to insurance regulator IRDA.

Solvency margin is the money that insurance companies keep aside as a cushion against defaults and is calculated in proportion to various kinds of risks.

Consultants have suggested many sources to raise the additional Rs 7,000 crore, T S Vijayan, chairman of LIC, said here today while refusing to divulge details.