Irdai directs Reliance Health Insurance to stop selling new policies

IRDAI has barred Reliance Health Insurance Ltd (RHICL) from selling new policies due to its weak financial health.
The regulator has also asked RHICL to transfer the entire policyholders’ liabilities along with financial assets to Reliance General Insurance Co Ltd (RGICL), which in turn will settle claims of the existing policyholders.
Irdai noted that Reliance Health Insurance was facing solvency issues. Solvency ratio loosely refers to the financial ability of an insurer to service its obligations, including payment to claims. RHICL had reported a solvency ratio of 106 per cent for the quarter ended June 30. It was below 150 per cent, which is the control level of solvency.
Irdai has also asked RHICL to “ring fence” its residual assets and not dispose them of without the insurance regulator’s prior written approval.