Refrain from paying FY20 dividend: Irdai urges insurers

TNN | Apr 25, 2020, 11:27 IST

(Representative image)

HYDERABAD: With businesses facing disruption in the wake of the Covid-19 lockdown, the Insurance Regulatory and Development Authority of India (Irdai) has advised insurers to manage financial resources prudently to ensure that they have adequate capital and take a “conscious call” on paying dividend for FY2019-20.
“In view of the emerging market conditions, and to conserve capital with the insurance companies in the interests of the policyholders and of the economy at large, insurers are urged to take a conscious call to refrain from dividend payouts from profits pertaining to the financial year ending March 31, 2020, till further instructions,” the insurance watchdog said in a circular.
This current position shall be reassessed by the authority based on financial results of insurers for the quarter ending September 30, 2020, it added.
In a circular on April 13, Irdai had advised insurers to critically examine their capital availability and solvency margins as required in the current financial year 2020-21 and devise strategies to ensure that they have adequate capital and resources available with them. It had also advised them to rationalise the expenses of management for the FY2020-21.