The Hindu Business Line : IRDA working on corporate governance code for insurers

THE Insurance Regulatory and Development Authority of India (IRDA) plans to come out with corporate governance guidelines for insurance companies. IRDA will be working in conjunction with RBI and SEBI for the guidelines.

Mr K.K. Srinivasan, Member, IRDA, said the authority would be working with the Life Insurance Council, the General Insurance Council and brokers' associations to work out the code for corporate governance.

He said the issue of corporate governance was particularly acute in the insurance industry, because none of the companies was listed.

"In the case of listed companies, corporate governance issues are taken care of by regulators such as the Securities and Exchange Board of India and the Company Law Board. Hence, IRDA will be framing specific regulation on corporate governance", he said, speaking at a seminar organised by the National Insurance Academy, here . Mr Srinivasan said while the existing regulations take care of any aberration, there is the need of a well-articulated code for the industry.

Speaking about the challenges facing the insurance industry, Mr Srinivasan said that distribution channels should be encouraged to increase penetration. A beginning has been made in this regard with the emergence of micro-insurance agents, he said.

With respect to the overhaul of mediclaim policies, Mr Srinivasan said that companies were individually working on products, which would be filed with the IRDA. He also stressed the importance of the clear definition of a `pre-existing illness' on the health insurance policy, particularly since it is the clause that is the cause for maximum disputes.

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