Following the recent rise in the premium rate, the Insurance Regulatory and Development Authority of India (Irdai) on Friday significantly eased capital adequacy standards for insurance companies to encourage their participation in the government’s flagship program Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).
The regulator has reduced the capital required to be held by insurance companies offering PMJJBY by almost 50%. This move will enable life insurance companies to offer more insurance under the scheme and provide financial security to the bottom of the Indian people’s pyramid through life insurance, Irdai said in a statement. Irdai’s easing of capital requirements will accelerate the penetration of life insurance policies in India and will support life insurance companies in achieving the target set by the government.
The government has recently raised the premium rates for the two flagship schemes – PMJJBY and Pradhan Mantri Suraksha Bima Yojana (PMSBY) – to make these schemes economically viable.
The premium rate for PMJJBY has been revised upwards to Rs 1.25 per share. day, meaning an increase from 330 Rs to 436 Rs annually with effect from 1 June. The number of active subscribers registered for PMJJBY was 64 million per. March 31, 2022
An amount of Rs 9,737 crs has been collected by the implementing insurance companies for premium and claims of Rs 14,144 have been paid under PMJJBY per. March 31, 2022
PMJJBY offers life insurance coverage of Rs 2 lakh in case of death due to any cause to persons in the age group 18-50 years who have a bank or post office account which gives their consent to participate or activate automatic debit of premium.