Page 9 - Insurance Times May 2022

IRDAI

News

IRDAI for easing 'entry' base. Panda said that he proposed to IRDAI seeks business
make licences for insurance intermedi-
norms plans from 3 PSU general
aries perpetual instead of renewable
IRDAI wants the removal of the mini- every three years. insurers
mum entry capital requirement of
"Current provision as per statute re- IRDAI has sought revised business
Rs.100 crore for setting up an insurance quires an investment of Rs 100 crore. plans from the three public sector
business in a bid to facilitate the entry
This Rs 100 crore may turn out to be a general insurers - National Insurance
of multiple players. Company, Oriental Insurance Com-
barrier than a facilitator. We proposed
Debasish Panda, Chairman, IRDAI, said to approach the government to amend pany and United Insurance Company.
it should be left to the regulator instead the act and remove this so-called mini- Fund infusion into the three compa-
to decide what should be the entry fee mum requirement and allow the regu- nies will be based on their meeting
for interested players, depending on lator to decide," Panda said. certain regulatory milestones.
the size of the business and operations. "For these three public sector gen-
According to the current norms, insur- He said that in the 20 years since
liberalisation, the industry has matured eral insurance companies, we have
ers are required to have a minimum asked for revised business plans. The
and was now at an inflection point and
paid-up capital of Rs. 100 crore. fund infusion would depend on their
the regulator needed to play a devel-
compliance with certain milestones
IRDAI chief planning opmental role to increase participation we have laid out so that there is a
in the insurance industry and ensure
roadmap for second phase that every household had insurance calibrated way of coming out of this
situation," said TM Alamelu, Mem-
of reforms cover. ber (non-life), IRDAI.

IRDAI Chairman, Debashish Panda, has Panda said that the regulator was re- The Centre has sought Rs. 5,000
laid out a road map for the second phase viewing norms that allowed insurers to crore for recapitalisation of the PSU
of reforms in the industry. hike health insurance rates only once in general insurers and is expected to

On the cards is a review of the entire three years. He said this led to a sud- announce a plan on this soon.
set of regulations for the sector to make den spike for the customer as the revi- "The government is aware of the
them 'light touch' and principle-based sion in the schedule of rates factored in present financials of insurance com-
as against the existing rule-based regu- medical inflation, besides which the in- panies. The regulator has given some
lations. IRDAI will also recommend to sured would end up paying more on forbearance with the advice also
the government to amend laws to en- moving to a higher age bracket. that may be they have to infuse more
able differentiated insurance licences On the revision of the capital require- capital in order to perform better,"
for micro insurers and regional insur- ments, Panda said that the regulator Panda said, while declining to give
ance companies with a lower capital was also looking at the solvency ratio more specific details.

The Insurance Times, May 2022 9