A new body is needed to protect policyholders trapped at failed insurers by either taking over all the failed firm’s policies itself or providing financial assistance to an insurer that offers to do so, a report released by a Finance Ministry study group suggested Friday.

But in either case, the conditions of the policies, such as the promised rates of interest and amounts insured, would be subject to change upon transfer. The study group’s report on a comprehensive framework for payment guarantees to policyholders is to be submitted to the ministry’s Insurance Council later this month.

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