Starting with a bang
24 May 2005
Life insurance companies come together to form a self regulatory organisation. By Venkatchari Jagannathan.
The Life Insurance Council has started with a bang. After its stormy first meeting at Mumbai, the council's recommendation to Insurance Regulatory and Development Authority (IRDA) to permit only term insurance cover for keyman insurance policy has been accepted. It may be recalled the policy was being misused to avoid tax and a couple of life insurers were mentioned as offenders.
The meeting also decided to form a market conduct committee to monitory the marketing practices of the players.
However, the council's secretary general S V Mony, terming the first meetingas healthy, said, "The discussions were healthy and the decision was unanimous. Further sub-committees are important for the functioning of any organisation. We will be forming several sub committees to look at various issues. On the whole we want the life insurance council to be the life insurance industry's self regulatory organisation."
Constituted under Section 64A of the Insurance Act 1938 the council will function through an executive committee. "Today, the council is a small organisation. We are in the process of forming the executive council."
According to the Act, the executive committee of the council would assist insurers in setting up standards of conduct and practice, customer service, advise IRDA on controlling insurers' expenses, bring to the IRDA's attention matters relating to any non-complying insurer.