Life insurers find hope in actuarial services
01 July 2002
It is learnt that HDFC Standard Life Insurance is actively interested in this field. An email questionnaire and several long-distance calls made to HDFC Stan Life managing director and CEO Deepak M Satwalekar, though, were unfruitful.
One of the reasons touted
by those in favour of allowing corporate actuaries practicing
actuaries under corporate structure is that it throws up new
business avenues for life insurance companies (See: ).
While lobbying is on to make the actuarial profession distinctively different to allow corporate actuarial entities, it is doubtful whether life insurance companies employing actuaries can enter the field. Can a company incorporated with the main object of doing insurance business be treated as one carrying on actuarial practice? This is the question doing the rounds.
Answers Actuarial Society of India president Nalin R Kapadia: "As per the advice of a Supreme Court advocate, an insurance company whose primary business is to undertake insurance activity can by no stretch of imagination be treated as a company carrying on an actuarial practice. Therefore, when it issues a letter of confirmation, as required by the Accounting Standard 15 of the Institute of Chartered Accountants of India, it cannot be said that the insurance company is carrying on the practice of an actuary."
"Further, there will be a clash of interests if life insurers are allowed to offer actuarial services," warns an actuary. The premium income from corporate clients will start playing a part with life insurers while certifying the gratuity fund valuations.
Industry sources say LIC was strictly warned by the finance ministry to stay away from such services decades back. Will the ministry stick to its stand or play a different tune? It depends on the lobbying strength of those in favour of corporate actuaries.
But with scams like UTI, Enron, WorldCom and others, it is expected that the finance ministry will play it safe and not be adventurous.