The Hindu Business Line : IRDA to make more disclosures mandatory

Mr J. Hari Narayan, Chairman, IRDA (second from right), handing over the first copy of ‘Star Health Magazine’ to Mr Chandrasekar of the Hyderabad-based Aarogyasri Trust, in Chennai on Sunday. Others seen are (from left) Mr Yogesh Lohiya, Chairman, GIC; Mr V. Jagannathan, CMD, Star Health; and Mr D.R. Karthikeyan, Director, Star Health.

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Chennai, Feb. 2 To improve corporate governance of insurance companies, the Insurance Regulatory and Development Authority (IRDA) expects to make it mandatory for insurance companies to make more disclosures to its policyholders.

Addressing media persons on the sidelines of launching Star Health Insurance’s health magazine, Mr J. Hari Narayan, Chairman, IRDA, said that currently insurance companies’ disclosures to the public is limited, the level of disclosures made by stock market listed companies are higher. “When people are making investments in insurance companies by buying policies they are expected to know about the company , he said. Insurance companies are governed by the Companies Act.

A committee would have to be set-up in this regard, he said, “I expect the disclosure norms to be in place by the end of the next financial year.”

Initiatives

Talking about various initiatives taken by the regulator, he said that an internal committee has been formed to bring draft guidelines for initial public offering and mergers & acquisitions.

Currently there are no guidelines for mergers and acquisitions but we plan to be prepared, we anticipate such moves in the coming years and expect to have the required guidelines in place by then to smoothen the process, he said.

On whether there would be review on the commission paid to agents, Mr Narayan said that the Insurance Act would have to be changed for it. “However, as I understand there is a need for rationalisation on the distribution structure to promote policyholder interest,” he said

He said that three new companies have filed for licence but declined to disclose the names. At present there are 22 life insurance companies, including the state-owned Life Insurance Corporation, and 21 general insurance companies.

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