Kochi:
The Insurance Regulatory and Development Authority (IRDA)
is waiting for the government to suggest further steps to
be taken on the report on the pension funds, according to
IRDA chairman N Rengachary.
Rengachary was delivering the keynote address at the wealth
management seminar organised by Geojit Securities here on
18 February. The report, submitted in October 2001, deals
with a system devised to give pension cover to the unorganised
and self-employed people.
Rengachary said of the 320-million working population, only
11 per cent is at present covered by a pension. This includes
mostly government employees and industrial workers. A vast
majority of 89 per cent does not have a pension cover.
In this time of nuclear families, the relevance of the pension
system has assumed importance as a major source of income
to protect people during the non-earning stage of life.
The authority wants every citizen to come under the pension
cover.
He allayed fears of solvency of the private insurance companies
that have entered the market saying the firms have been
asked by IRDA to ensure solvency level at every point of
time. The solvency has to be at 150 per cent the 50-per
cent reserve to meet any liability that arises.
 Every
year the companies have to value the assets and liabilities.
If there is a deficit, the companies have to pump in money
and if there is a surplus, it has to be diverted to a surplus
account to declare a bonus. The investor has access to IRDA
on any complaints on the insurance company. Though the minimum
investment for the insurance company is Rs 100 crore, many
need to have around 400 crore to meet future liabilities.
As of now, 92.5 per cent of the returns has been set apart
for shareholders, leaving just 7.5 per cent for the participating
company. IRDA is planning to enhance the share of the companies
from 7.5 per cent to 10 per cent, so investment in insurance
will not be affected by a lack of return.
IRDA has given permission for 13 private companies to start
business in the life insurance sector. Further, two applications
are pending approval. In general insurance, six private
companies have been given permission to operate, he said.
Presiding over the function, Kerala State Industrial Development
Corporation managing director Jiji Thomson said with several
insurance firms in the fray, quality of service will be
the benchmark to distinguish them.
Speaking on personal risk management and the role of life
insurance in personal financial planning, Venkitesh Mysore,
managing director of MetLife India Insurance, with which
Geojit has tied up for distributing insurance products,
said a company has six steps to achieve success in the insurance
field setting goals and prioritising them, gathering facts,
analysing, recommending, implementing strategies and reviewing
the plans.
Geojit chairman A P Kurian in his presentation on asset
allocation and financial planning said wealth centres of
the company give advise on financial planning like doctors
prescribing medicines after diagnosis.
In
his welcome speech, Geojit managing director C J George
said Geojit has emerged as a provider of a complete range
of financial management solutions aimed at retail market
after its tie-up with MetLife.
The first policy was handed to the policyholder Varghese
Jose by Mysore. George handed over Rs 4.5-crore of insurance
proposals to Venkitesh.
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