Solvency will be maintained in DHFL insurance arms, says IRDAI chief

The IRDAI has stated that it will assure 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. 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. Khuntia also stated that the more insurances are needed 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 underlined that 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% growth in insurance,” he said, while adding that numbers for the first three to four months of the fiscal have been positive.