In exercise of powers conferred vide Rule 3 of Post Office Life Insurance Rules

## Report on Directorate of Postal Life Insurance Notification (February 18, 2021) **1. Executive Summary:** This report analyzes a notification issued by the Directorate of Postal Life Insurance (PLI), Department of Posts, Ministry of Communications, Government of India, dated February 18, 2021. This notification announces revised Reversionary Bonus rates for Postal Life Insurance (PLI) policies for the financial year 2021-22 and addresses interim bonus payments until the next valuation. The core purpose of the notification is to inform policyholders and relevant stakeholders about the updated bonus rates applicable to various PLI schemes, thereby impacting the returns on their policies. Key findings include the specific bonus rates for different policy types (Whole Life Assurance, Endowment Assurance, Anticipated Endowment Assurance, and Convertible Whole Life Policies) and the introduction of a terminal bonus. **2. Introduction:** This report provides an analysis of the Directorate of Postal Life Insurance's notification dated February 18, 2021, regarding bonus rates for Postal Life Insurance policies. The report aims to inform the affected industry and stakeholders about the key provisions, implications, and expected impact of this notification based solely on the information contained within the provided text. **3. Policy Overview:** This is a new policy notification regarding bonus rates and not an amendment. * **Core Objective(s):** The primary objective of this notification is to declare the simple Reversionary Bonus rates for Postal Life Insurance policies for the financial year 2021-22. Additionally, it clarifies the applicability of these rates and outlines interim bonus provisions. **4. Background and Rationale:** This notification addresses the periodic declaration of bonus rates for Postal Life Insurance policies. The likely issue it addresses is the need to regularly update policyholders on the returns on their investments, ensuring transparency and maintaining the attractiveness of PLI schemes. The declaration is based on the Actuarial Valuation of the assets and liabilities of the Post Office Life Insurance Fund (POLIF) as of 31.03.2020, reflecting the financial performance of the fund. **5. Key Provisions / Changes:** This notification introduces new bonus rates for PLI policies: * **Whole Life Assurance (WLA):** Rs. 76 per thousand of sum assured. * **Endowment Assurance (EA):** Rs. 52 per thousand of sum assured, including Joint life children policies. * **Anticipated Endowment Assurance (AEA):** Rs. 48 per thousand of sum assured. * **Convertible Whole Life Policies (CWA):** Whole Life bonus rate is applicable, but on conversion, the Endowment Assurance bonus rate will be applicable. * **Terminal Bonus:** Rs. 20 per sum assured of Rs. 10,000 (0.2%), subject to a maximum of Rs. 1000 for Whole Life Assurance and Endowment Assurance policies with a term of 20 years or more. * The new bonus rates are applicable from **01.04.2021** (for the financial year 2021-22). * Interim bonus at the stated rates will be payable for all claims arising due to maturity or death until the next valuation is completed. * The amount of bonus is rounded to the nearest Rupee, with fractions of 50 paisa or more rounded up and fractions below 50 paisa ignored. **6. Target Audience and Stakeholders:** The target audience and stakeholders directly affected by this notification include: * **Postal Life Insurance policyholders:** Individuals holding various PLI policies (WLA, EA, AEA, CWA) who will receive bonuses based on the revised rates. * **Beneficiaries of deceased policyholders:** Those who will receive claims, including the bonus amounts, based on the specified rates. * **Department of Posts personnel:** Employees involved in processing claims and managing PLI policies. * **Actuarial professionals:** Involved in the valuation of the POLIF and the calculation of bonus rates. **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies:** The Directorate of Postal Life Insurance (PLI) and the Department of Posts are responsible for implementing the notification. The Director General Posts approved the bonus rates based on the actuarial valuation. The Chief General Manager PLI is responsible for the notification. * **Timelines:** The new bonus rates are effective from April 1, 2021. The interim bonus will be payable until the next valuation is completed. * **Procedures:** The notification implies a procedure for calculating and disbursing bonus amounts based on the policy type, sum assured, and claim type (maturity or death). The rounding rule will be applied during bonus calculation. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of this notification are: * **Enhanced policyholder satisfaction:** By declaring and applying competitive bonus rates, the PLI aims to retain existing policyholders and attract new customers. * **Increased transparency:** Clear communication of bonus rates ensures policyholders are informed about the returns on their investments. * **Financial security for policyholders and beneficiaries:** The bonus payouts contribute to the financial well-being of policyholders upon maturity and provide financial support to beneficiaries in the event of death. * **Maintaining the attractiveness of PLI schemes:** Regular updates to bonus rates, based on actuarial valuations, help maintain the competitiveness and appeal of PLI products. **9. Conclusion:** The Directorate of Postal Life Insurance notification dated February 18, 2021, announces revised bonus rates for Postal Life Insurance policies for the financial year 2021-22, applicable from April 1, 2021. These changes directly impact policyholders by influencing the returns on their investments and the payouts received upon maturity or claim settlement. The notification reflects the periodic assessment and adjustment of bonus rates based on the financial performance of the Post Office Life Insurance Fund, ensuring that PLI schemes remain attractive and provide financial security to policyholders and their beneficiaries.

Key Entities Referenced