The Insurance Regulatory and Development Authority of India on Thursday said it will ensure that there are no solvency issues for insurance subsidiaries of troubled Dewan Housing Finance Corporation.

“We will ensure that solvency is maintained. As of now, there is no solvency issue,” Subhash Chandra Khuntia, Chairman, IRDAI, told reporters on the sidelines of the CII Insurance and Pensions Summit.

Cash-strapped DHFL has defaulted on repayments of borrowings and is currently working with banks on a resolution plan.

The company has two insurance arms — DHFL Pramerica Life Insurance and DHFL General Insurance. Insurers have been permitted to be part of the inter-creditor agreement with banks.

Meanwhile, addressing the conference, Khuntia underlined that there is more need for insurance when there is a slight downturn in the economy. “Unlike other sectors of the economy, we should not look at depressed growth rates,” he said.

He further said there is tremendous scope for insurance penetration and urged insurers to focus on sectors like motor and health insurance.

“We should strive hard to increase growth and should not look at less than 15 per cent growth in insurance,” he said, adding that numbers for the first three to four months of the fiscal have been positive.

With the downturn in the automobile sector, insurers must work with vehicle owners who do not renew their insurance policies.

He also expressed hope that the Motor Vehicles Act amendments that have increased penalties will make drivers more careful and reduce accidents. This, in turn, should help bring down claims. Consequently, it will help lower the premiums, making motor insurance more affordable.

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