“No Runaway Profits”: Sitharaman Explains How Insurance Rules Protect Policyholders

Finance Minister Nirmala Sitharaman has outlined strong regulatory safeguards governing India’s insurance sector, stressing that policyholder interests remain fully protected. She said insurers must maintain a minimum solvency ratio of 1.5, ensuring assets are at least 1.5 times their liabilities. Companies are also mandatorily required to make provisions for incurred-but-not-reported and under-reported claims before calculating profits. Addressing concerns over foreign investment, Sitharaman clarified that private insurers already participate extensively in government schemes such as Jeevan Jyoti Bima Yojana and Suraksha Bima Yojana, enrolling over 20 crore beneficiaries. She added that capital infusion into public sector insurers strengthened operations, reduced losses, and improved performance, with two companies already turning profitable.