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Is there any government guarantor if life insurance corporation of india become insolvent ?

April 26, 2017Business corporation Finance government guarantor India insolvent Insurance Life Insurance

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Is there any government guarantor if life insurance corporation of india become insolvent ?

2 Answers

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First of all, LIC becoming Insolvent is very unlikely. Second of all, all the Insurance companies are obligated to maintain “Solvency margin” or Cash reserve to meet unforeseen exigencies or capital loss. Hope this clarifies ur query.

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Every insurance company is under IRDA controller which is similar to RBI. The rule says no companies can be closed it can only be merged. So always customers r safe. Example: AMP-SANMAR a life insurance company today does not exist and is merged with RELIANCE life insurance. ALL insurance companies have to maintian solvancy margin by law. Which LIC has also started to follow lately. So i believe this answers this question.