Foreign mortality/morbidity table for critical illness adopted by IRDA

According to IRDA's Assets, Liabilities and Solvency margin of Insurers Regulations, Mortality / morbidity rates used by insurers should be with reference to a published table that is available to the industry.

Alternatively a life insurance company can have its own table based on its experience provided it is made available to the industry through the Actuarial Society of India (ASI) and IRDA.

Ever since the liberalisation of the life insurance industry, the private life insurers are using the government-owned Life Insurance Corporation of India's (LIC) mortality and morbidity table to price their products.

However, as there was no benchmark table for pricing or valuing the liabilities of critical illness policies and rider covers, they used the tables provided by foreign reinsurers, though found lacking in consistency.

ASI, upon a reference by IRDA on this subject, has now suggested a standard reference critical illness rate table. Curiously, this table is not based on the Indian experience.

In order to construct a table based on the Indian experience IRDA has asked all the life insurers to maintain data of policies and claims experience on a continuous basis and submit their analysis.