If the insurance compnay from which i ahve taken a policy closes down, what will happen to my policy? Is there any policy from the government which will protect my policy?
Answer – Dear Friend, I can’t tell u about future as no one knows what lies in future but we can certainly get an indication from history. Some 4 years back there was a Life Ins. co. in India named AMP SANMAR, which was a joint venture between AMP Life insurance Co. of Australia & Sanmar Group from South India. Due to several reasons, both co. decided to part ways & intimated IRDA for their willingness of exiting the business. IRDA intervened & asked Reliance Life Insurance Co. to Take over the business of AMP Sanmar Life Ins. Co. & here comes the most customer friendly act of IRDA in favor of policy holders. Reliance was told to keep older policies run as per the previous Terms & conditions as agreed upon by AMP Sanmar & rel. can’t changed these midway.
Another example – Earlier the Gen. ins. business of HDFC was a JV of HDFC & Chubb, later on chubb decided to exit the JV, IRDA allowed HDFC to run the Co. solo till it find another partner & now this co. is known as HDFC ERGO, where ERGO is the new JV partner.
I hope the above examples ‘ll clear ur doubts. Yes failure of Ins. co. due to extra ordinary high claims or consecutive losses on its investment portfolio (this is not on ULIP but for traditional policies) AIG’s case is an example.