The finance ministry has formed four committees to take stock of insurance business in the country with representation from insurance companies, industry bodies, rating agencies and finance ministry officials. The panels that will prepare a “road map” for the insurance industry in India do not have any representation from India’s insurance regulator, three people involved in the process said.
In a first of its kind meeting last week with insurance companies and industry bodies, the ministry also asked their feedback on the Insurance and Regulatory Development of India, or Irda.
The consultation process is part of the finance ministry’s plan to set up advisory groups across segments to discuss issues affecting the sector and finding solutions for these problems. These committees have been formed under these advisory groups to undertake industry-wide consultation.
“It is a consultative exercise. We want to know what are the issues plaguing the insurance industry and the kind of road map that can be envisaged for the sector,” said a finance ministry official, who did not want to be identified. “We want the industry’s view on how to increase penetration, and steps that can be undertaken in the short and long term.”
The four committees will look into issues related to the growth of the industry, development of products, issues with the regulator and other bodies, one of the people who attended the meeting said.
The committees will also discuss ways to improve insurance penetration in the country.
According to a senior Irda official, the regulator was not informed of any such meeting by the ministry and the consultation has been undertaken without keeping Irda in the loop. Irda chairman J. Hari Narayan said, “The post of member (life) is vacant and hence there was no representation.”
In the past, the finance ministry and Irda have been at loggerheads after the ministry directed General Insurance Corp. of India (GIC Re) not to pay ceding commissions to general insurance firms for the business they mandatorily reinsure with GIC Re. Irda had to step in to force GIC Re to honour the contracts with the insurance companies.
In a first of its kind meeting last week with insurance companies and industry bodies, the ministry also asked their feedback on the Insurance and Regulatory Development of India, or Irda.
The consultation process is part of the finance ministry’s plan to set up advisory groups across segments to discuss issues affecting the sector and finding solutions for these problems. These committees have been formed under these advisory groups to undertake industry-wide consultation.
“It is a consultative exercise. We want to know what are the issues plaguing the insurance industry and the kind of road map that can be envisaged for the sector,” said a finance ministry official, who did not want to be identified. “We want the industry’s view on how to increase penetration, and steps that can be undertaken in the short and long term.”
The four committees will look into issues related to the growth of the industry, development of products, issues with the regulator and other bodies, one of the people who attended the meeting said.
The committees will also discuss ways to improve insurance penetration in the country.
According to a senior Irda official, the regulator was not informed of any such meeting by the ministry and the consultation has been undertaken without keeping Irda in the loop. Irda chairman J. Hari Narayan said, “The post of member (life) is vacant and hence there was no representation.”
In the past, the finance ministry and Irda have been at loggerheads after the ministry directed General Insurance Corp. of India (GIC Re) not to pay ceding commissions to general insurance firms for the business they mandatorily reinsure with GIC Re. Irda had to step in to force GIC Re to honour the contracts with the insurance companies.
[source]
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