Ceylinco life declares Rs. 955 m in annual bonuses to policyholders

Ceylinco Life celebrated its strong solvency margin with the declaration of a colossal Rs. 955 million in annual bonus payments to policyholders from the surplus generated by its Life Fund in 2006.

The bonuses paid after completion of an annual actuarial valuation of the company's Life Fund, benefited more than 275,000 eligible policyholders, the company said this week.

According to the statutory actuarial valuation of Ceylinco Life's Life Fund by the Eminent independent international consulting actuaries Messrs Watson Wyatt worldwide, the company's Life Fund stood at Rs. 13.9 billion at the end of 2006, indicating a healthy growth of 17 per cent during the year.

Significantly, the life solvency margin (the difference between the value of admissible assets and liabilities) maintained by Ceylinco Life's Fund is more than five times that stipulated by the Insurance Industry Act, the company said.

Ninety per cent of the surplus generated from participating business has been reserved for payment of bonuses to participating policies, Ceylinco Life Director, Amali Seneviratne said.

Ceylinco Life declares bonuses from the very first year of issue of a policy, enabling even a policyholder who obtained a policy in December 2006 to receive a bonus allotment as at December 31, she said.

"It is very encouraging to see that our market leadership based on premium income is perfectly matched with our stability and the returns we offer policyholders," Ceylinco Life Chief Executive Director R. Renganathan said. "We have ensured that their investments in life insurance consistently yield good returns."

He said the bonuses paid this year will contribute significantly to the overall returns to policyholders, whose policies on maturity would yield well above what was promised. For example, a policy under endowment assurance with a guaranteed sum assured of Rs. 100,000 maturing after 15 years in 2006 would be paid a maturity value of Rs. 171,500, reflecting an increase of 71.5 per cent over the promised value.