Page 9 - Insurance Times June 2021

comprehensive tele-functionalities allow to complete withdrawal of their sure if we can manage the kind of
(both manual and IVR) to all insurance money. returns that the insurance industry
consumer segments. It serves as a 12 “The notification will be issued in the gives,” the pension regulator said.
hours X 6 days' service platform, next few days. An investment of Rs 2 Already, fund management fees for
offering multiple languages and fund managers have been increased
lakh will not get you much via annuities,”
integrating channels. "It is envisaged Bandyopadhyay said. Separately, and PFRDA is looking to expand the
that the IGCC would not only attend to number from seven to 10 with the
PFRDA has suggested to the
phone calls and e-mails but also government that the annual tax benefit process expected to start at the end of
complaints forwarded by the consumer of Rs 50,000 for NPS investment should the month. Besides, going forward,
affairs department of the authority, be doubled. “We are suggesting that licences will be available on tap.
subject to internal procedures, the pension coming from annuity should
complaint registration process and be made tax-free up to a certain level, IRDAI remains headless
other process requirements," it added.
say, Rs 10 lakh a year. It should be either amid raging pandemic
tax-free or lower tax may be charged...
Regulator in talks with IRDAI has turned headless after
Today, a monthly income of Rs 60,000- chairman S C Khuntia retired on May 6
government for NPS 70,000 may look decent but 10-15 years without a successor being appointed.
overhaul down the line, it may not even meet While the office has remained vacant
your basic needs. So, indexation and
The pension regulator is in talks with in the past, the current situation could
taxation can play a role,” he told.
the government for an overhaul of the throw challenges as the industry is in
National Pension System (NPS) — The changes come at a time when the thick of the Covid battle and IRDAI
several individuals are looking to park a has to make snap decisions over health
including changes to the tax regime,
allowing insurance agents to hawk the part of their provident fund contribution claims. The government may appoint
scheme and launching systematic in other long-term saving instruments an acting chairman in the interim.
withdrawal plans as well as annuities after the government changed the tax However, those holding temporary
indexed to inflation to offer higher rules to make the interest on employee positions do not take policy decisions.
returns — PFRDA chairman Supratim contribution over Rs 2.5 lakh taxable. The post is not expected to be filled up
Bandyopadhyay told. While NPS was introduced for the anytime soon as the government has set
private sector nearly 12 years ago, its May 29 as the deadline for aspirants to
While implementation of some of the assets under management (AUM) are send in their applications. Even last time,
changes has already begun, others such under Rs 1 lakh crore, compared to a when Khuntia was appointed as IRDAI
as allowing investors to park their entire Rs 7.5-lakh crore corpus with insurance chief in May 2018, the regulator was
corpus into systematic withdrawal plans companies. Bandyopadhyay said headless for over two months after T S
(SWPs) will require amendments to the PFRDA is also looking to register Vijayan retired. The lack of urgency
law. Currently, NPS subscribers can individuals as points of presence (PoPs) shown by the government in ensuring the
withdraw up to 60% of the corpus at or to be part of the distribution network appointment of a successor promptly,
the time of their retirement and the and is willing to pay a higher commission given the current situation, came in for
remaining has to be used to purchase to expand the base. Currently, banks considerable flak from the industry.
annuities that will fetch them income and institutional entities act as PoPs and
for the rest of their lives. are paid Rs 200 to get a new customer Meanwhile, the Banks Board Bureau
recommended the appointment of Mini
With annuities offering 5-6% return in and 0.2% of the investment as Ipe and B C Patnaik for the position of
a falling interest rate regime, many commission. “The effort has been to managing directors of Life Insurance
investors do not see it as an attractive keep the overall cost structure low. It Corporation. The board also
proposition, prompting Pension Fund has helped subscribers, but a time has recommended Inderjeet Singh and
Regulatory & Development Authority come to encourage the distribution Suchita Gupta for the position of
(PFRDA) to seek inflation-indexed channel to improve the coverage and chairman in United India and National
annuities from the insurance regulator expand the corpus. Today, the threat Insurance, respectively. “At the time of
IRDAI. The matter is currently being of dying early is slowly going away and the pandemic, certain ‘stern’ decisions
examined by a committee. In the it is taken over by the risk of living long. have to be taken, which only the
meanwhile, for those with a corpus of We will try to see what best we can give chairperson can take with ease,” an
up to Rs 5 lakh, rules will be eased to to our distribution partners but I am not industry insider said. T
The Insurance Times, June 2021 9