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Affect of taxing high-value insurance policies to be ‘minimum’ for LIC: Kumar

Affect of taxing high-value insurance policies to be ‘minimum’ for LIC: Kumar

The Finances proposal to tax source of revenue from all non-ULIP merchandise the place combination insurance coverage top class paid in a yr exceeds Rs 5 lakh can have a “minimum” impression on Existence Insurance coverage Company of India, its chairman MR Kumar stated on Friday.

“Final time, an in depth round was once issued (in case of Ulips)… we higher look ahead to a round. We have now executed sure calculations, and according to that, the impression for us is minimum,” Kumar stated throughout a convention name with analysts and buyers.

Existence insurance coverage firms are anticipated to take successful, and has sought a overview of the proposal. The principle call for is to extend the edge top class for taxation for non-ulip merchandise from proposed Rs 5 lakh to Rs 10 lakh.

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Kumar additionally stated LIC would feel free to go into the medical health insurance area if composite licences come into impact.

The federal government has put out draft amendments for extra reforms within the insurance coverage sector, together with a provision for composite licence. A composite licence will permit an insurer to adopt a couple of traces of companies.

“We’re somewhat enthusiastic about the opportunity of promoting legal responsibility insurance coverage. And, we had executed it prior to now as neatly when the regulator had allowed lifestyles insurers to promote legal responsibility insurance coverage. Later, it was once withdrawn. So, if it comes again, we might feel free to get again to that area. I’m positive the brokers, who’re promoting well being merchandise for different firms, will come again to promote our merchandise,” Kumar stated.

LIC stated on an annualised top class an identical (APE) foundation, the whole top class was once Rs 37,545 crore for the 9 months ended December 31, 2022. Of this, Rs 23,419 crore (62.38%) was once accounted for by way of the person industry and Rs 14,126 crore (37.62%) by way of the crowd industry. Throughout the particular person industry, the proportion of par merchandise at the APE foundation was once 90.55% and the stability 9.45% was once non-par merchandise.

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The price of latest industry (VNB) (gross) for the 9 months to December 31, 2022, was once Rs 7,187 crore and the gross VNB margin was once 19.1%. The online VNB margin was once at 14.6%.

“As a contribution to the whole portfolio, Ulips are rising greater than non-par financial savings merchandise. However margins on Ulip merchandise are low. So, those merchandise convey down margins relatively. Clearly, it is going to be looked after from different segments like annuity and non-par financial savings,” a senior reputable of LIC identified.


Supply By means of https://www.financialexpress.com/cash/insurance coverage/impact-of-taxing-high-value-policies-to-be-minimal-for-lic-kumar/2978464/