ESTIMATION OF VALUATION SURPLUS AS AT 31/3/2026

ESTIMATION OF VALUATION SURPLUS AS AT 31/3/2026

LIC has stopped publishing the figures of valuation surplus in the Annual Reports for the last few years and my requests for the information under RTI Act 2005 has also been denied by the CPIO.

So, I thought of estimating the valuation surplus as at 31/3/2026 bu using the figures in the public domain adopting the following methodology:

 Valuation Surplus is the sum of Par Surplus (PS) and Non-par Surplus (NPS) under the policies in the Corporation. Presently 90% of the Par Surplus is distributed to policyholders by way of bonus under wih profit policies.10% of par surplus is paid to the shareholders.100% of non-par surplus is paid to the shareholders.

The Central Government received a dividend cheque for Rs 12207.75 Cr from LIC.

LIC owns 96.5% of the share s presently and the Public own 3.5% of the equity shares in LIC

The Policyholders received Bonus to the extent of Rs 59726 cr being the 90% of the Par-Surplus.

LIC got an amount of 96.5% of the amount from Par-Surplus, viz, Rs 6403.954.

Let NPS be the total non-par valuation Surplus. Then LIC got 0.965* NPS.

Let NPS be the total non-par valuation Surplus of LIC as at 31/3/2026.

This gives the equation

(6403.954)+(0.965 * NPS)= 12207.25.

ie

0.965*NPS=(12207.25 - 6403.954)

So

NPS=(12207.25 - 6403.954)/0.965

=(5803.296)/.965

=6013.778

Solving this equation, we get NPS= 6013.778

 PS= (59726×10/9)=66362.22

Total Valuation Surplus =PS+NPS= 66362.22+6013.778= Rs 72376 Cr.

Actuaries may validate my estimation of possible or enlighten me if I have gone wrong.

C H MAHADEVAN