AMP cuts bonus to policy holders

Chennai: The AMP Sanmar Life Insurance Company Limited, whose promoters want to exit the insurance business, has cut the reversionary bonus rates on some of its products for 2004-05. The bonuses are payable on all the participating policies in force as on 31^st March 2005. Reversionary bonus are the ones that gets added up to the policy and paid at the time of maturity or claim.

The company's board declared a bonus of 5.5 per cent (simple) on sum assured consisting of 4 per cent reversionary bonus and 1.5 per cent additional non-recurring reversionary on its Nithya Shree whole life plan and Divya Shree simple endowment single premium plan. Last year the bonus rate was 6 per cent. For Divya Shree the bonus rate is 2.75 per cent — 2 per cent regular reversionary plus 0.75 per cent additional non-recurring reversionary bonus.

In the case of money back scheme, Dhana Shree, and child protection plan, Yuva Shree, the bonus rate is 2.75 per cent (simple) — 2 per cent regular reversionary plus 0.75 per cent additional non-recurring reversionary bonus. Last year the bonus rate was 3 per cent.

Similarly, in the case of it endowment policy Subha Shree the bonus rate is cut by 0.25 per cent to 2.75 per cent (simple) consisting of 2 per cent regular reversionary plus 0.75 per cent additional non-recurring reversionary bonus.

According to Graham Meyer, the poor market conditions had forced the company to cut the bonus rates.

While Meyer is silent on the stake sale, it is learnt that the Insurance Regulatory and Development Authority (IRDA) wants the suspense to end quickly. According to sources something concrete could be heard on the subject next week.