How customers are protected from private life insurers (especially the foreign life insurers)?

[anish09]

How customers are protected from private life insurers (especially the foreign life insurers, even though they have only 24% ownership in Indian venture), in case they run away with the customers money? I am been told that IRDA, the insurance regulator, is there but what if the company is not able to sustain on its own and have to close their operations like become bankrupt. What will happen to the insured in these cases as life insurance contacts are long term contacts (20-30 years) and at later stage new insurer won’t pick the insured with loading and higher premium?

[Madhura]

Anish -
It is not as simple for any company to go bankrupt in India. Every insurer has to maintain 'solvency margins'. IRDA keep watch on all the activities of the insurer and advise it in case of any wrong doing. If something still go wrong or insurer wants to exit than IRDA ask another insurer to take over the business with same terms and conditions. So don't worry!

[PolicyWala]

Read here a complete article - http://www.policywala.com/content.php/153-How-safe-is-your-insurance-company