ULIP exposures to Satyam to be disclosed

Tuesday 13, January, 2009 HYDERABAD: Life insurance companies will have to disclose the exact amount they have pumped into Satyam shares from unit-linked insurance plans Tips for buying an insurance policy | How to choose an insurance broker (ULIPs). The insurance regulator will soon ask insurers to assess the impact of their exposure to Satyam on their balance sheets, J Hari Narayan, chairman of the Insurance Regulatory Development Authority (IRDA), told ET. Satyam shares plummeted after disgraced founder B Ramalinga Raju confessed to his involvement in a Rs 7,000-crore financial fraud last week. The regulator is concerned that the fall in Satyam’s share price could have dragged down the net asset value (NAV) of ULIP schemes that have an exposure to the stock. ULIPs are akin to mutual funds, but come with a life cover. “We will call for data from life insurers to see how much of ULIP funds have been invested in Satyam shares,” said Mr Narayan. The disclosure is understood to be driven by the enormity of the Satyam scam. In 2001, when the Ketan Parekh scam broke out, financial market regulators had asked institutions to disclose their exposure to the so-called K-10 stocks in which Mr Parekh had invested.

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