IRDAI to issue corporate governance norms this month
Mumbai : Insurance Regulatory and Development Authority of India (IRDAI) will issue corporate governance norms this month to address issues such as management control of insurance companies among other things, its chairman T S Vijayan said here today.
“We are issuing corporate governance guidelines in October and this will also include issues of management control,” Vijayan told reporters here.
Regulation for reinsurance companies will also be out this month. About seven foreign companies may open their branches here, he said.
In its ongoing efforts to streamline the sector, IRDAI is also regulating the expenses of management of insurance companies and proposing price revision based on the claim ratio, Vijayan said.
“The accounting regulation will also come shortly. We will ask the companies to state their accounts segment wise with the premium, claim, and expenses for the segment in that segment,” he said while addressing the industry at a conference.
“We hope this will help regulate and curtail the margins in the expense payout through a review of product pricing,” the chairman added.
“By April 1, 2016 some sanity will come in our industry,” he said, stressing on the need for claims to be settled on time.
IRDAI is also in the process of digitising its database to enable better tracking of the insurance agents.
The sale of a policy by the agent will be mapped digitally and in event of a complaint, the agent who has sold the policy can be traced.
He drew attention to the need to provide proper skill development to policy agents, given the “difficult nature of selling protection”.
He cited that there are more than 22 lakh agents in the system with several whose livelihood is solely dependent on this industry.
The regulator also sounded caution on the frauds taking place in the industry, and the need to keep a check on it.
Strong vigilance is needed by insurance agencies. Industry has to come together to create a platform to keep a check on frauds, he said.
He said the industry needs time to pass, think and adopt the regulatory changes, and the regulatory body would “calibrate the changes according to the needs, but the changes are surely coming”.
“Even the regulation that has come, industry players have not really understood how it is going to affect their business. It is the fine print that is significant,” he said.