Mumbai: Policy formulations that may alter the course of life insurance industry can wait, at least for the time being. The finance ministry has asked Insurance Regulatory and Development Authority (Irda) to keep in abeyance two key regulations till the new chairman takes over.
“The ministry wants the new chairman to review important regulations that will have a serious impact on the industry,” said a source with direct knowledge of the matter.
The incumbent, J Hari Narayan (pictured), is retiring on February 20. T S Vijayan, former chairman, LIC, and K Sahay, ex-CEO of Star Union Daiichi, are in contention for the top job.
Product design and bancassurance are two of the key regulations where a policy decision is being keenly awaited. In the second week of January, the Irda board cleared a set of comprehensive guidelines on design and structure of traditional insurance products. Notably, those guidelines have not moved for gazette notification as yet. The regulator and the industry have been locked in a series of deliberations to give these norms a final shape.
A top industry official sees little chance of product design guidelines getting notified soon in its proposed form. “Since it has been cleared by the Irda board, there is a possibility of getting it notified first in its scheme of things. Due to the complexity of language and concepts, a lot of work needs to be done in translating it into Hindi version and may require further simplification,” said a senior official from the industry.
Insurers got jangled nerves when Irda stipulated shorter deadlines to refile the entire spectrum of products in compliance with the proposed regulations. The regulator wanted changes like maintaining a minimum premium payment term at five years, capping the maximum commission that can be charged for the first year and subsequent years and phasing out products guaranteeing highest net asset value.
Even on the bancassurance front, the stakeholders have reservations over the format proposed by the regulator. According to the suggestions, banks can sell insurance products by either becoming a broker or a bancassurance partner with those opting to be brokers and having to withdraw from their existing bancassurance partnerships. Expectedly, Irda board did not approve the draft regulation on such tie-ups.
Even the Reserve Bank of India had expressed concerns about banks’ role in distributing insurance products under the proposed framework. “The new person who assumes office will have to be responsible for the newly implemented norms and it is fair enough to allow him to review the impact on all stakeholders,” said an industry source.
It’s also believed that the post of member actuary at Irda will be filled after the new chairman assumes office. Currently, Purnima Gupta (Appointed actuary at Reliance Life) and Meena Kumari (deputy director – actuarial, Irda) are in the reckoning for the actuary job.
Last Friday, the Irda board gave its okay to regulations on health, standard proposal forms and guidelines on surveyors and loss assessors.
COURTESY:
Aswathy Varughese l @Aswathy_04
Published Date: Feb 15, 2013
http://epaper.dnaindia.com/story.aspx?id=39078&boxid=14562&ed_date=2013-02-15&ed_code=820009&ed_page=11
“The ministry wants the new chairman to review important regulations that will have a serious impact on the industry,” said a source with direct knowledge of the matter.
The incumbent, J Hari Narayan (pictured), is retiring on February 20. T S Vijayan, former chairman, LIC, and K Sahay, ex-CEO of Star Union Daiichi, are in contention for the top job.
Product design and bancassurance are two of the key regulations where a policy decision is being keenly awaited. In the second week of January, the Irda board cleared a set of comprehensive guidelines on design and structure of traditional insurance products. Notably, those guidelines have not moved for gazette notification as yet. The regulator and the industry have been locked in a series of deliberations to give these norms a final shape.
A top industry official sees little chance of product design guidelines getting notified soon in its proposed form. “Since it has been cleared by the Irda board, there is a possibility of getting it notified first in its scheme of things. Due to the complexity of language and concepts, a lot of work needs to be done in translating it into Hindi version and may require further simplification,” said a senior official from the industry.
Insurers got jangled nerves when Irda stipulated shorter deadlines to refile the entire spectrum of products in compliance with the proposed regulations. The regulator wanted changes like maintaining a minimum premium payment term at five years, capping the maximum commission that can be charged for the first year and subsequent years and phasing out products guaranteeing highest net asset value.
Even on the bancassurance front, the stakeholders have reservations over the format proposed by the regulator. According to the suggestions, banks can sell insurance products by either becoming a broker or a bancassurance partner with those opting to be brokers and having to withdraw from their existing bancassurance partnerships. Expectedly, Irda board did not approve the draft regulation on such tie-ups.
Even the Reserve Bank of India had expressed concerns about banks’ role in distributing insurance products under the proposed framework. “The new person who assumes office will have to be responsible for the newly implemented norms and it is fair enough to allow him to review the impact on all stakeholders,” said an industry source.
It’s also believed that the post of member actuary at Irda will be filled after the new chairman assumes office. Currently, Purnima Gupta (Appointed actuary at Reliance Life) and Meena Kumari (deputy director – actuarial, Irda) are in the reckoning for the actuary job.
Last Friday, the Irda board gave its okay to regulations on health, standard proposal forms and guidelines on surveyors and loss assessors.
COURTESY:
Aswathy Varughese l @Aswathy_04
Published Date: Feb 15, 2013
http://epaper.dnaindia.com/story.aspx?id=39078&boxid=14562&ed_date=2013-02-15&ed_code=820009&ed_page=11
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