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Just about three weeks since taking over as Chairman of Insurance Regulatory and Development Authority of India, Debasish Panda has charted out a list of top priorities including a review of the initial capital of Rs 100 crore for starting an insurance venture.
“We will request the government to amend the Insurance Act so that the ₹100 crore capital requirement can be reduced and the regulation for this can be set by the IRDAI,” Panda said on Thursday on a visit to Mumbai, where he met heads of insurance firms.
“During deliberations with industry, we realised this ₹100 crore requirement is more of a barrier,” he said, adding that such a move enable standalone niche and micro insurance players to start operations..
The IRDAI is also examining the risk based solvency requirements for insurance companies and is likely to come out with norms on this.
Further, the insurance regulator is looking at how to bring foreign reinsurance players at par with State-owned General Insurance Corporation of India so as to support growth of the industry.
Incorporating tech
Outlining four to five key themes for the IRDAI, Panda said the focus would be on increasing the distribution reach of insurance by measures by proposals such as Bima Mitras, lighter and tech based regulations and rather than rule base regulations as well as a lower compliance burden for insurance companies.
Working groups are being set up with the industry on many of these themes to identify key proposals.
“We want technology to be incorporated in a big way….We want to enable tech entities to enter the insurance market to meet the needs of the under and uninsured population,” Panda said, adding that there have to be adequate distribution channels to cater to the needs of different geographies and segments.
The target is to ensure that every person has a life insurance policy and every family has a health insurance cover, the IRDAI Chief stressed.
Bringing in capital
The IRDAI is also reviewing the current investment norms to enable more investments in the country and for existing players to bring more capital. This can be done by measures such as listing of insurance, which would also enable greater transparency and disclosure, Panda explained.
Another focus area is reviewing the current investment guidelines for insurance companies to give them some leeway to offer returns are also commensurate.
“We want to move towards a use and file model, which will give more flexibility to insurance companies. The price of products will be determined by the market,” he said.
The IRDAI also proposes to do away with requirement for renewals for insurance intermediaries and the license can be given for perpetuity, which could be revoked in certain conditions.
A large number of these proposals are likely to be implemented over the next few months.
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