Reliance Health Insurance which started its operations in October 2018 has not been able to maintain the required solvency margin since June 2019. According to IRDA (insurance regulator), the company’s solvency fell below 63%. Insurer was asked to restore solvency within a month but its inability to do so led regulators to take that step.

Readers may like to know that Section 64VA(3) of the Insurance Act requires an insurer to maintain control level of solvency at 150%.

Reliance Health is part of Reliance Capital (ADAG) and was set up as a separate entity from Reliance General Insurance.

In the order, IRDA has given orders to Reliance Health Insurance for transferring all its assets to Reliance General Insurance by November 15, 2019. Till then Reliance health has been prohibited from using its assets for any payment other than claim settlement.

Reliance Health Insurance has been asked to notify to all its existing members about this decision.

IRDA has said that it will be closely monitoring the smooth transfer of portfolio, settlement of claims and protection of the interest of all policyholders.

Existing Policyholders need not get worried as Reliance General Insurance has been directed by IRDA to keep all assets and liabilities of Reliance health insurance separate from its General Insurance business and to promptly settle claims arising out of Reliance Health Insurance portfolio. The procedure for all this will be available on the website of Reliance General Insurance, and also on the notice board at offices and branches.