Get ready for next phase of reforms - Part 1
05 January 2006
Unlike other regulatory authorities in India, the Insurance Regulatory and Development Authority (IRDA) seems to have acquitted itself quite well during the past five years. The perception that IRDA would be instrumental in shaping the development of the private sector and also regulate the public sector insurance companies, turned out to be unfounded.
In Part 1 of the interview C S Rao, chairman, IRDA, talks about the life insurance segment.
Chennai: "We have reasons to be satisfied with the progress made by the insurance industry in India since liberalisation. The public confidence in the industry is positive today and the industry on the whole is far more dynamic and has scored well on number of parameters," says C S Rao, chairman, IRDA.
This could well be true. The sudden exit of both the promoters of AMP Sanmar Life Insurance Company Limited did not create any panic amongst the company's policyholders. Similarly, the issue of Life Insurance Corporation of India's (LIC) solvency margin was handled carefully. The country's premier life insurer today meets the stipulated solvency norms — though it falls short of the administrative fiat issued by IRDA. Incidentally even Max New York Life Insurance Company Limited did not meet the norms for a brief span.
"Today, there are 15 life insurers of whom14 private life insurers. Similarly of the 12 general insurers operating in the country eight are private non-life insurers. In addition, we have some more applications from prospective insurers with us. The insurance industry has been able to attract foreign direct investment (FDI) of upto Rs1,288.44 crore which is one of the highest in the services sector," explains Rao.