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Radhika Menon

Mumbai, Oct. 2 Insurers have now come under the close scrutiny of the Insurance Regulatory and Development Authority (IRDA).

For the first time, IRDA has started conducting on-site inspections of insurance companies and has already completed the inspections of a few companies.

“Earlier inspections were done to investigate market conduct issues or check on investments as and when issues came up. But we are now making a comprehensive inspection of all insurance companies once in a year — after all, it is the routine job of a regulator,” Mr C.S. Rao, Chairman, IRDA, told Business Line.

The insurance regulator has constituted three teams consisting of three members each for conducting these on-site inspections. There will also be one additional member who will check on compliance with all regulations.

“The inspections will be conducted in a phased manner and they will ensure all systems are in place, particularly with respect to managing investments - the back office and the front office. We will also look at grievance redressal systems, market conduct issues and scrutinise the accounts and the minutes of the board meetings,” Mr Rao said.

“Earlier, insurers were mainly offering traditional products, but as the market has evolved they are now coming out with more complicated products.”

The Chairman said that the immediate concern for the regulator was that insurers maintain their solvency and ensure that the policyholder’s money is safe. The regulator will also pay keen attention to the intermediaries (insurance agents, corporate agents) of the insurance companies.

These inspections will be conducted on both life and non-life companies. In the case of non-life companies, IRDA has so far been focusing only on two or three companies where there was an overload of claims, Mr Rao said.

With the existing number of players, the IRDA will be able to conduct these inspections once a year

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