DHFL bankruptcy: Irdai rules out troubles for two insurance arms

As of September, DHFL Pramerica Life's solvency ratio stood at 388 per cent and that of DHFL General Insurance at 230 per cent, according to the public disclosures made by them. The regulator-mandated solvency ratio is 150 per cent. "Even if the parent company goes for liquidation, it will be sold and somebody else will take over. So, DHFL's share in these insurance companies will be transferred to the new owners," he said and assured that no policyholders will be affected during the process. However, Khuntia asked insurers to write off their exposures to the housing finance company in the similar manner as they followed in the case of the now bankrupt IL&FS. "There is a procedure for how the exposures to DHFL is to be written off and when...they will have to follow that," he said without explaining how much is the exposure of insurance players to DHFL. He also said insurers which have exposure to DHFL's NCDs will also benefit from the bankruptcy resolution. "When the NCLT resolves this case, insurers being part of the ICA, will get whatever their share from the sale proceeds." It can be noted that Irdai had allowed insurers to sign inter creditor agreement, which the RBI mandated in the revised NPA resolution framework issued on June 7. ... DailyhuntDisclaimer: This story is auto-aggregated by a computer program and has not been created or edited by Dailyhunt. Publisher: Deccan Chroniclehttp://doodleordie.com/profile/jumenshenses

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