State-owned insurers face Irdai's litmus test before IPO

Irdai has barred National Insurance's actuary for 'overstating profits and distorting solvency'

The government’s plan to list all the public sector general insurance companies in 2017-18 (FY18) is likely to face hurdles after the Insurance Regulatory and Development Authority of India (Irdai) barred the actuary of the country’s second-largest general insurance company, National Insurance Company, for supposedly understating claims by more than Rs 4,000 crore.

According to Irdai’s circular, the ‘Incurred But Not Reported Claims Reserves’ (IBNRs), estimated by Manalur Sandilya, have gravely imperilled the financial position of the insurer and resulted in overstating the insurer’s profits and its premature distribution, endangered the payment of benefits to policyholders, and distorted the solvency position