LIC says PMJJBY policyholders are not eligible for 'quota benefits'

LIC issued a clarification saying Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) subscribers are not eligible to avail the benefits offered to policyholders in the proposed IPO

Life Insurance Corporation of India on Tuesday issued a clarification saying Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) subscribers are not eligible to avail the benefits offered to policyholders in the proposed initial public offering (IPO).

"This is to clarify on the story which if floating around that states "PMJJBY Policy Holders" can apply in the category reserved for policyholders in IPO, is incorrect. Please note it has been inadvertently mentioned. It is a group insurance product and isn't eligible," Life Insurance Corporation of India said in a statement.

The insurer's clarifications came a day after its Chairman M R Kumar said at a virtual media interaction that PMJJBY subscribers are also eligible for the benefits available for policyholders.

However, LIC said in the statement that it was "inadvertently mentioned". As per the Draft Red Herring Prospectus (DRHP) submitted by LIC with the market regulator SEBI, 10 per cent of the total LIC share offer will be kept reserved for the LIC policyholders. There are also speculations about discounts. However, the LIC has not yet announced any plan for offering discounts to the policyholders in the proposed IPO.

Referring to the DRHP document, LIC said subscribers of group insurance products, including PMJJBY, cannot apply in the policyholder category in the upcoming IPO.

"Policyholders (excluding such other persons not eligible under applicable laws, rules, regulations and non-Individual policyholders) of our Corporation having one or more policies of our Corporation as on the date of the DRHP and Bid / Offer Opening Date and are residents of India would be eligible to apply in this Offer under the Policyholder Reservation Portion," LIC said in the DRHP documents.

A policyholder of our Corporation shall ensure that his / her PAN details are updated in the policy records of our Corporation at the earliest. A policyholder who has not updated his / her PAN details with our Corporation before the expiry of two weeks from the date of the filing of this Draft Red Herring Prospectus with SEBI (i.e., by February 28, 2022) shall not be considered as an Eligible Policyholder, LIC said.