Playing down the differences with finance ministry and market regulator SEBI in the past, outgoing IRDA chairman Hari Narayan today said such instances rather help in defining the boundaries more clearly and there are no threats to the freedom of the insurance watchdog.
“Difference of opinion will always strengthen the institutions. They sharpen the thinking process. They define boundaries more clearly,” Hari Narayan said in an interview here.
On his last day in office after serving as Chairman of Insurance Regulatory and Development Authority, Hari Narayan said the powers to both SEBI and IRDA are adequate and that the differences of opinion regarding Unit Linked Insurance Policies (ULIPs) with SEBI around three years ago helped understand the matter in a better way.
With regard to state-run LIC being allowed by government to own greater stakes in listed companies vis-a-vis peers, Hari Narayan said IRDA was not at all let down by the finance ministry on this issue and the regulator enjoys complete freedom.
“No, not at all...I find on the other hand that the ministry and the government have been exceedingly supportive of IRDA. I think the power of IRDA which is there in the Act is pretty adequate”.
“I think the government allows the regulator complete freedom and there is no fundamental threat to those rights,” the IRDA chief said.
Differences had recently emerged between the finance ministry and IRDA over the issue of raising investment limit for LIC.
IRDA’s stance had been that LIC should be kept at par with private insurers regarding investment cap while the Ministry had favoured higher limits for LIC.
In 2010, IRDA and SEBI had sparred over regulatory jurisdiction for unit linked insurance products, which mainly invest in capital markets.
While IRDA regulates insurance companies, capital markets are overseen by SEBI. Differences cropped up between both the regulators after SEBI banned 14 life insurance companies from raising fresh money in ULIP schemes.
The IRDA had argued that the ULIPs were cleared by it and hence were valid. The issue was later sorted out in favour of the insurance watchdog.
Replying to a query on the final guidelines for traditional life insurance products, he said they will be gazetted soon.
In June last year, the insurance regulator had circulated draft guidelines on the proposed changes in life insurance products.