KPN committee moots minimising government''s role in insurance

30 May 2005

Chennai: Apart from removing the redundant provisions in the Insurance Act 1938 and other insurance laws, the thrust of K P Narasimhan Committee is to evolve an insurance law that is simple and stable.

The committee members are unanimous in their view that operation and regulatory issues should be dealt with by Insurance Act, regulations framed by the Insurance Regulatory and Development Authority (IRDA), and the self regulating bodies like the life / general insurance councils while leaving the policy and other macro aspects to be dealt by the Insurance Act.

The idea is to minimise the government's role in governing the sector and empower the regulator and the self regulating bodies.

In line with this philosophy some of the present IRDA's functions are to be transferred to the insurance councils. The logic being, IRDA should deal with the institutions and not with the individuals. The function of licensing agents, surveyors, third party administrators etc will be transferred to the industry's self regulatory organisations from IRDA.

"TPA is nothing but outsourcing of certain functions by the insurers. Logically IRDA should not have any role," reasons a source.