It's bonanza time for Life Insurance Corporation's (LIC [Get Quote]) over 200 million policyholders.

The public sector insurance major on Friday declared a bonus of Rs 70 per Rs 1000 sum assured for whole-life plans compared with Rs 66 of the previous financial year. The increase ranges from 10 per cent to 50 per cent depending on the type of plan and the term.

LIC's valuation surplus grew by 22 per cent to Rs 15, 127.21 crore for FY07 compared with Rs 12,404.82 crore in FY06. The increase in bonus was by booking profits in the market and controlling costs, T S Vijayan, chairman, LIC, said while announcing the valuation results for FY07.

Like every year, 95 per cent of the surplus was distributed among policyholders and the balance 5 per cent goes to the central government.

Policyholders of Jeevan Tarang (a combination of wholelife and money back plan) will get a 50 per cent higher bonus of Rs 48 per Rs 1000 sum assured. The bonus for the Jeevan Anurag has been increased by 25 per cent to Rs 44 per Rs 1000 sum assured.

Under the endowment type of plans, the bonus ranges from Rs 34 to Rs 48. The rates of final additional bonus went up by 10 per cent to Rs 1,850 per Rs 1,000 sum assured.

LIC has also achieved 150 per cent solvency margin as on March 31, 2007, amounting to Rs 36, 472 crore, Vijayan said. Insurance companies are required to maintain at least 150 per cent of the required solvency margin, subject to a minimum of Rs 50 crore, in addition to the minimum equity capital of Rs 100 crore. The solvency margin is a sum of certain percentages of both the reserves and the sum at risk.

Vijayan said LIC has seen a 31 per cent growth in new business premium to over Rs 15,000 crore till August.

LIC is targeting a huge increase in its investment kitty to Rs 1,17,000 crore for FY08. Till August, a total of Rs 50,000 crore have been invested, of which Rs 12,000 crore has been invested in equities and Rs 30,000 in debt.

On overseas plans, Vijayan said LIC was in talks with IRDA and the government for permission to open representative offices in the US, Australia and Singapore to sell policies to the Indian diaspora.

LIC's lapse ratio is 3.5 per cent and Vijayan said the corporation would launch products which do not lapse.