As stipulated by the Insurance and Regulatory Development Authority (IRDA), in its circular dated July 29, 2011 the formula for computation of the Net Asset Value Per Unit (NAV) for Linked funds stands modified effective August 18, 2011.
Old formula as prescribed by IRDA and as contained in the policy document:
Market value / fair value of the investment, plus / (minus) expenses incurred in the purchase / (sale) of assets, plus value of current assets and accrued interest (net of fund management charges), less value of current liabilities and provisions, if any, divided by, the number of units existing under the fund at valuation date (before creation / redemption of units).
Modified formula as stipulated by IRDA effective August 18, 2011:
Market value of investment held by the fund plus value of current assets less value of current liabilities and provisions, if any, divided by, the number of units existing on valuation date (before creation / redemption of units)
The policy document shall accordingly stand modified.
We confirm, there is no change to the number of units to the credit of any policyholder on account of this change.
Policyholders may also refer to public notice issued by the 'Life Insurance Council' in leading national newspapers on October 8, 2011, on behalf of Life Insurance Companies in this regard.
NAV appearing on public holidays including Saturdays and Sundays (Non NAV days) is of the previous working day .
IRDA vide circular ref IRDA/F&I/INV/CIR/213/10/2013 dated October 30, 2013 issued guidance on the valuation of equity shares. As per the same, we have chosen the National Stock Exchange (NSE) as our primary exchange and the Bombay Stock Exchange (BSE) as our secondary exchange. Until the date of change, equity shares are valued at the lower of the closing prices of NSE or BSE in line with the previous regulations. Going forward, all equity securities will be valued at the closing price as per the NSE and in cases when the same is not available, as per closing price of the BSE. The change in the policy would be implemented latest by November 29, 2013, which is within the 30 days of the circular issued by IRDA.