ADVERTISEMENT
LIC did not pay govt dividend for 2 years to build capital for IPO: ReportLIC currently has a capital base of Rs 100 crore and a small reserve, though it controls assets worth Rs 38 lakh crore
DH Web Desk
Last Updated IST
Representative image. Credit: iStock photo
Representative image. Credit: iStock photo

State insurer Life Insurance Corporation (LIC) has accumulated Rs 6,300 crore in capital by not paying the government any dividend for the past two years ahead of its much-anticipated initial public offering, sources told The Indian Express.

LIC distributes its entire profit between the government and its policyholders, following a ratio of 95:5, where five per cent of its profit goes to the government as dividend, while 95 per cent is distributed among the policyholders. The total profit reported by the insurer during FY21 was Rs 2,901 crore against Rs 2,713 crore in the previous year. The company paid Rs 2,611 crore as dividend in FY19.

LIC currently has a capital base of Rs 100 crore and a small reserve, though it controls assets worth Rs 38 lakh crore and services over 30 crore policies. While the government raised the authorised capital base of the LIC to Rs 24,900 crore in Budget 2021-22, it is not known when this capital will be infused.

The LIC's claim settlement ratio was 98.62 per cent as of March 31, 2021, compared to 96.69 per cent in the previous year, and the proportion of its claims repudiated/rejected fell to 1.0 per cent in 2020-21 from 1.09 per cent in the previous year, the report said. Its income was Rs 2.79 lakh in 2020-21.

The insurer paid benefits worth Rs 2.86 lakh crore in 2020-21, constituting 70.85 per cent of the premium underwritten.

Watch latest videos by DH here:

ADVERTISEMENT
(Published 16 January 2022, 13:56 IST)