Come October and the life insurance division of the postal department will start investing its premium collections in revenue-generating instruments including stocks, a government official said.
Postal Life Insurance will follow the investment norms set by the Insurance Regulatory and Development Authority (Irda) from October 1 to ensure maximum return for investors through a systematic and well-charted investment policy, said the official, requesting anonymity. At present, the department's collections are transferred to a special deposit scheme on which it earns a secure interest of 8% from the government.
As per the plan, the department can invest a maximum of 15% of its daily net collections, averaging Rs 6-8 crore, into equity schemes. The balance 85% will go into secured instruments with at least 50% of the sum invested in government securities and a minimum 15% in infrastructure bonds, said the official requesting anonymity. Postal Life Insurance makes an annual net collection of Rs 2,000-2 ,500 crore.
Net collection is the revenue generated in the form of premium minus costs like interest payment and maturity claims. The department will hire professional asset managers for deployment of its premium kitty in financial instruments. It has zeroed in on SBI Mutual Fund and UTI AMC as fund managers, the official said. They will be paid on a commission basis.
Once the new scheme is kick-started, the department may see equity investments equal to 15% of its average daily collections, the official said. The department will have its investment division in Mumbai. The funds for setting the office is being raised from within, the official further said.
"By and large, the equity investments will be done on a day-to-day basis, with exceptions on days when the quantum of the net collection is very less," the official said.
Postal Life Insurance will follow the investment norms set by the Insurance Regulatory and Development Authority (Irda) from October 1 to ensure maximum return for investors through a systematic and well-charted investment policy, said the official, requesting anonymity. At present, the department's collections are transferred to a special deposit scheme on which it earns a secure interest of 8% from the government.
As per the plan, the department can invest a maximum of 15% of its daily net collections, averaging Rs 6-8 crore, into equity schemes. The balance 85% will go into secured instruments with at least 50% of the sum invested in government securities and a minimum 15% in infrastructure bonds, said the official requesting anonymity. Postal Life Insurance makes an annual net collection of Rs 2,000-2 ,500 crore.
Net collection is the revenue generated in the form of premium minus costs like interest payment and maturity claims. The department will hire professional asset managers for deployment of its premium kitty in financial instruments. It has zeroed in on SBI Mutual Fund and UTI AMC as fund managers, the official said. They will be paid on a commission basis.
Once the new scheme is kick-started, the department may see equity investments equal to 15% of its average daily collections, the official said. The department will have its investment division in Mumbai. The funds for setting the office is being raised from within, the official further said.
"By and large, the equity investments will be done on a day-to-day basis, with exceptions on days when the quantum of the net collection is very less," the official said.
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