Exploring indexing annuity rates to inflation or G-secs: Irdai Chairman

Annuity products may switch to floating rates from fixed, which generally give lower returns to customers

The Insurance Regulatory and Development Authority (Irdai) of India is exploring the possibility of indexing annuity rates to government securities or the inflation rate so that they reflect the cost of living of consumers. Essentially, there may be a change to floating rates for annuity products from the fixed rate regime, which generally gives lower returns to customers.

Subash Chandar Khuntia, Irdai chairman, said, “We are actively looking into this because we feel if the annuity rate is indexed to something which reflects the cost of living, it will be good for both the insurers and the policyholders”.

“So, we