Business Daily from THE HINDU group of publications
Saturday, Nov 07, 2009
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Business Daily from THE HINDU group of publications Saturday, Nov 07, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Money & Banking
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Insurance Web Extras - Regulatory Bodies & Rulings Swarup panel proposals not ‘well-founded’ 
Mr J. Hari Narayan Our Bureau Hyderabad, Nov. 6 The Swarup Committee recommendations pertaining to the insurance sector are not “well-founded”, according to Mr J. Hari Narayan, Chairman, Insurance Regulatory and Development Authority. There were some gaps and discrepancies in the report and a deeper examination of the entire recommendations had to be done, Mr Hari Narayan told newspersons on the sidelines of the graduation ceremony at the Institute of Insurance and Risk Management here on Friday. The IRDA chief’s comments are significant in the wake of protests from insurance agents on the recent recommendations of a six-member Government panel headed by Mr D. Swarup, Chairman, Pension Fund Regulatory and Development Authority, on common minimum standards for financial advisors. The panel recommended, among others, that the insurance agents be disallowed from drawing commission from premium paid by the policy holder in a phased manner. Currently, an agent can get commission up to Rs 40 on every Rs 100 paid as first year premium by the policy holders. It goes on to decrease progressively to Rs 5 after the third year. The IRDA is discussing the issue of allowing insurance companies to go for initial public offers with the SEBI. “We hope to conclude the discussions soon and the guidelines for insurers on IPOs will be announced thereafter,” he said. On the likely conflict of jurisdiction of IRDA and SEBI in regulating IPOs of insurers, Mr Narayan said: “That is what we are discussing. But as a market regulator, SEBI will have its own role.” The authority had so far received request from one company for permission to go public, he said and refused to disclose further details. Any company was free to apply to IRDA even before the framing of the guidelines for IPOs, he added. The health of insurance industry was ‘satisfactory’ and one should be optimistic about its growth, he observed. Earlier, while addressing the 30 students who completed a one-year executive programme in insurance and risk management, he cautioned that there could be one more bubble building up in the global economic system basing itself on a dropping dollar and dropping interest rates. More Stories on : Insurance | Regulatory Bodies & Rulings
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