IRDAI directs Reliance Health Insurance to stop sale of its policies

November 8: Insurance Regulatory and Development Authority (IRDAI) on Thursday stopped Reliance Health Insurance Co. Ltd. (RHIC) from selling insurance. The move from the insurance regulator comes after the standalone health insurer recorded a continuous fall in its solvency margin. Reliance Health Insurance is part of Anil Ambani’s Reliance Group, which has been facing serious liquidity issues.

Solvency margin is the margin of assets over liabilities, and indicates whether a company is solvent enough to be able to cover for its liabilities. It is mandatory to maintain the margin for all life and non-life insurers, as per IRDAI’s Assets, Liabilities and Solvency Margin of Insurers Rule 2000.

IRDAI said in a statement said, “It further said that despite repeated follow-up, the insurer did not improve its capital. Thereafter, the insurer was issued a show cause notice and given another opportunity to present its case. But there has been no improvement and rather a deterioration in the financial position of RHCIL.”