Page 10 - Insurance Times May 2022

norms and would consider the want Insurance Regulatory and Devel- optional, even before the pandemic,
timeframe for moving to a risk-based opment Authority of India (IRDAI) to in- many consumers believe that the same
framework. tervene and direct insurance companies insurance companies ask them for a
to provide physical copy of policy docu- physical copy while claiming for the
There will also be a review of the 'open
ments to customers as a choice. policy amount, it said.
architecture model', which determines
how many companies a bank can rep- Incidentally, while several insurance The companies not only ask for the
resent, to see whether it is inhibiting companies decided to 'go green' by ei- physical copy of the insurance policy but
growth. ther discarding physical copies of insur- also other necessary supporting docu-
ance policies completely or making it ments, it added.
IRDAI may go for 100% FDI
IRDAI to relook at regulations to widen insurance pen-
for new Insurance Com-
etration and give insurers more flexibility
pany
The Insurance Regulatory and Development Authority of India (IRDAI) will
IRDAIis planning to expand the scope
relook at regulations, capital requirements and introduce new products to
of the sector by allowing 100 Percent
widen the penetration and give insurers more flexibility in their operations,
FDI in new Insurance Companies.
chairman Debashish Panda said.
After two years of consideration and Working groups will be formed to relook at current regulations with an aim to
internal discussions, IRDAmay allow lighten them and give more flexibility for companies to launch new product,
100% direct foreign investment in cer- Panda who took charge of the IRDAI less than a month ago said. He spoke to the
tain types of insurance. Such a change media after interacting with industry leaders in Mumbai over the last few days.
is hoped to provide the opportunity for
“Broadly we will have a principle based regulations rather than rule based
FDI growth in sectors like health insur-
regulations. We will fix the broad framework and then give companies the
ance or hybrid plans that go beyond
flexibility to work within that. The whole aim is to have lighter regulations and
basic life or motor coverage.
if there are over a 100 regulations we can bring it down to 10 to 15. The
insurance industry has matured now and they understand the rules of the
Majority wants insurers to game and the market,” Panda who took over as IRDAI chairman for a three
year term last month said.
restart sending physical
The IRDAI plans to form three to four different working groups to relook at
copies of policy docu- regulations to remove those that are not required, identify ones that need
ments, says survey modification and those that are completely outdated. “We will also have IRDA
officials besides industry people to deliberate and discuss on the changes so
A majority of individuals want insurance
that there is a consultative process right from inception. We also want to
companies to restart sending them propose an amendment to the Insurance Act to reduce capital requirements
physical copies of their insurance docu- which will allow small niche players to come into the market,” Panda said.
ments along with digital format as
Currently, the IRDA Act 1999 specifies that all insurance companies have to
COVID-19 cases have ebbed, according
have a capital base of Rs 100 crore, which Panda said was disincentivising small
to a survey. Almost 88 per cent of the technology driven mciro insurance companies which can provide services in
respondents prefer to have a physical
the hinterland and widen the scope for insurance.
copy of their insurance document as
“Just like there are small finance banks and micro finance institutions in the
insurance companies may demand it at
the time of a claim, according to the banking sector we need technology led insurance companies offering standard
products with defined benefits to small traders, shopkeepers, farmers or micro
findings of a survey of around 5,000 re-
enterprises at a reasonable premium.
spondents across age groups and
cities. At Rs 100 crore capital base these niche players cannot come in so we need to
open the door for them and move to a capital requirement depending on the
A survey by the Bombay Master Printers
size and operations of companies,” Panda who served as secretary, department
Association (BMPA) further indicated
of financial Services, before he superannuated in January this year said. T
that over 80 per cent of the respondents

10 The Insurance Times, May 2022