Irdai sets up committees to suggest industry overhaul

To overhaul the insurance sector, the Insurance Regulatory and Development Authority of India (Irdai) has formed various committees through the General Insurance Council (GIC) to suggest reforms in several areas of general, reinsurance and life insurance such as regulation, product, distribution, among others.

These panels include heads of private and public sector insurance companies, members of Irdai and representatives from the GIC, said an official. GIC was formed by Irdai to act as a link between the insurance regulator and the non-life insurance industry, and has representation from the industry. About five committees each have been formed to suggest changes in the general insurance business, non-life insurance space, and two panels will look into the reinsurance segment.

These panels have been formed to look into areas of regulation, products, distribution, finance, health, finance, taxation, ease of doing business, among others. The industry representatives have also been asked to highlight the issues they have been facing and suggest steps that can be taken, said another official. Some recommendations have already been submitted to the insurance regulator, he added.

The committees were constituted after the new Irdai Chairman Debasish Panda held an interaction with insurance industry players last month. It was decided that areas such as reducing compliance burden for the industry, rationalising investment norms, among others will be reviewed. An enabling framework for entry of more global players in the industry will also be identified, among some of the other reforms for the industry.

The panels have IRDAI members that will put sanctity in the acceptance of the recommendations of these committees, the first official quoted above said.

These panels would suggest changes that can be made in regulations and legislation which would be considered by Irdai and the Department of Financial Services.

These committees have also roped in Loknath Kar who was the former exlegal head of ICICI Lombard and PWC to draft the reports. This is the first time that private sector hands have been entrusted with such a task, the official quoted above said.