In InsuranceSamadhan.com’s A-Z Blog series on Insurance topics, we try to provide all vital information related to the Insurance sector and demystify certain myths related to the sector. In today's blog, we are sharing detailed information regarding – Protection of Policy Holder interest by IRDA– and everything that one needs to know.
All Policy Holders, specially of Private Insurance companies, have worries about the future as given below:
- What if Company runs away?
- Is our money safe?
- What if company closes down?
- Will company pay the claim?
IRDA, the regulator of Insurance Industry has thought of all fears and incorporated Insurance Act to protect the interest of all Policy Holders.
All Policy Holders must be aware of provisions given below:
- Safety of Money: Section 27 A provide guidelines on investment by Life Insurance Companies i.e
- 25% of investment should be in Government Securities with 100% sovereign guarantee.
- Not less than 50% investment should be done with government approved securities including the 25% mentioned above this means that 50% investment has 100% sovereign guarantee of investor money.
- Not less than 15% investment should be made with infrastructure or social sector. These sectors need to be approved by IRDA.
So overall 65% investment are absolutely under the guidelines of IRDA.
- Balance 35% investments can be done as specified in regulation 5. This investment can never exceed 35%.
These provisions ensures that interest of Policy holders are protected. Insurance Samadhan also represent grievance using all legal provisions and try for resolution.
At InsuranceSamadhan.com, we have helped resolve over 12,600 customer grievance cases in the past related to Life Insurance, Health Insurance, General Insurance and other financial products.
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