India’s insurance watchdog examining Tata AIG’s solvencySeptember 16th, 2008 - 8:02 pm ICT by IANS
New Delhi, Sep 16 (IANS) India’s insurance watchdog Tuesday said it was probing the impact of the crisis being faced by the US-based financial services giant American Insurance Group (AIG) on its two Indian ventures with the Tata group.”We are looking at what impact the developments overseas will have on both the life and non-life business of AIG in India,” said R. Kannan, member-actuary with the Insurance Regulatory and Development Authority of India (IRDA).
“So far, what we have found is: Both the ventures - Tata AIG Life Insurance and Tata AIG General Insurance - are complying with the solvency requirement,” Kannan told IANS over phone from Hyderabad.
AIG has a 26-percent equity each in the two ventures, while the rest is held by the Tata group - India’s largest private sector business house with a combined turnover of $62.5 billion from as many as 96 companies.
Officials at the regulatory authority also explained that the Tatas have also given an undertaking that in the event of additional capital being required in the two ventures, they had the financial muscle to meet the requirement.
“To assess the financial health of an insurance company, the regulatory has an instrument and that is the solvency ratio. We examine this on a quarterly basis. So far, we have not found any cause for concern,” Kannan said.
As per the norms laid down by the regulator, the assets of an insurance company must be at least one-and-a-half times more than its liabilities - that is a solvency ratio of 150 percent, officials explained.
The global financial markets were thrown into a tailspin Monday after news that Lehman Bros. was filing for bankruptcy, Merrill Lynch was being sold to Bank of America for $50 billion and AIG wanted $75 billion to dress its balance sheet.
- Expert 'actuaries' who assess insurance risk getting younger - Dec 28, 2010
- Flexibility needed to fill vacancies at insurance regulator: Expert - May 30, 2011
- Insurance regulator faces actuarial vacuum - May 24, 2011
- Strengthen actuarial departments, says insurance regulator - Dec 23, 2010
- Draft norms for merger of non-life insurers announced - Feb 10, 2011
- Indian insurers asked to spread wings abroad - Jul 06, 2012
- Penalty on HDFC Standard Life seen as warning - Jul 03, 2012
- Norms soon for calculating embedded value of insurers - Jun 26, 2011
- Insurance regulator bracing for spat with judiciary - Feb 14, 2011
- Insurers to discuss revision in health, motor insurance - Jul 03, 2012
- HDFC Standard Life COO quits - Jul 03, 2012
- Institute of Actuaries of India to expand overseas - Oct 25, 2010
- More than 250 ULIPs sucked out of the market - Sep 02, 2010
- Indian insurers don't have database for Solvency II: Regulator - Jun 23, 2011
- Insurance fund for road accident victims facing deficit - Dec 11, 2010
Tags: aig life insurance, american insurance group, bank of america, filing for bankruptcy, financial muscle, global financial markets, group india, insurance regulatory and development authority, insurance regulatory and development authority of india, insurance watchdog, kannan, lehman bros, merrill lynch, private sector business, solvency ratio, tata aig general insurance, tata aig life, tata aig life insurance, tata group, tatas