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The Insurance Regulatory Development Authority of India (IRDAI) will issue corporate governance norms this month. It will also address, among others, issues such as management control of insurance companies, and regulation of insurance agents, said IRDAI Chairman TS Vijayan on Thursday.
The IRDAI will also be issuing guidelines for regulating insurance agents. The sale of a policy by an agent would be mapped and in the event of a complaint the agent, who has actually made the sale, would be traced, he told media persons on the sidelines of an insurance summit hosted by Assocham.
Re-insurance regulationsVijayan said that pending regulations for reinsurance companies will also be put in place this month. About six to seven foreign companies have shown interest and they might open their branches in the country, he said.
On the issue of life insurance companies having to pay higher taxes under the Goods and Services Tax (GST) regime, Vijayan remained noncommittal. He merely said taxation of companies is a matter for the Finance Minister to take a call.
Earlier in the day, while addressing members of the industry at the summit, Vijayan said industry players are saying that only 10 regulations will be issued. But that is just the tip of the iceberg. A lot more will come, which will change the working of the industry, he added.
The industry players have not really understood how their businesses are going to get affected due to the changes in regulations. In areas, such as the role of insurance agents and remuneration of CEOs, changes will occur, the IRDAI chief said.
An insurance agent is going to be an intermediary, representing the interests of the customers. Each policy procured from an agent will be mapped using the agent’s Aadhar number. In the event of a complaint, details of the policy can be viewed online and follow-up measures taken, Vijayan said.
Gap in coverageHe pointed that the IRDAI was concerned with the gap in the coverage of assets in the general insurance sector. Advanced countries have 77 per cent coverage of the assets, while in India it is 7 per cent, which is a huge gap.
The assets protected by the insurance industry are very small compared to the size of the Indian economy.
The protection component in insurance products needs to be expanded, he emphasised.
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