IRDAI directs Reliance Health Insurance to stop new policy sell

IRDAI has recently directed Reliance Health Insurance Company (RHCIL) to put a cap on the sale of new policies and transfer the entire policyholders’ liabilities to the authority. In a press release, the IRDAI had announced from now on, the insurer can only serve its old policies. Reliance Health Insurance is presently facing major liquidity issues. As per IRDAI, Reliance Health Insurance has failed to maintain the required solvency margin since June, 2019. “After it came to the knowledge of IRDAI in the latter part of August, 2019, a direction was issued to RHICL to restore the required level of solvency margin within a period of one month. However, despite repeated follow-up, this has not been carried out so far. Thereafter, the insurer was issued a show-cause notice and given another opportunity to present its case,” stated IRDAI in its release.