Page 9 - The Insurance Times September 2022

cess 10% of the total outstanding AT1 health insurer can claim any relaxations network of healthcare plus insurance
bonds of that particular bank," IRDAI to comply with the money-laundering services countrywide.
said. rules, as set out by the Reserve Bank of
India.
Earlier, the cap was meant for any par- IRDAI flags reforms for in-
ticular primary issuance of those bonds, Also, IRDAI has made the level of risk
vestment, expenses
popularly known as perpetual papers. assessment a function of the size of the
IRDAI has backed its growth push by
business of the companies. So the "pe-
AT1 bonds have no fixed maturities and flagging off reforms in the areas of in-
riodicity of conducting anti-money laun-
are raised to shore up the capital base. vestment, distribution and manage-
dering and counter financing of terror-
These quasi-equity securities yield much
ment expenses for insurers. The reforms
ism programme review and compliance
higher returns than traditional bonds envisage easing limits on investing in the
audit and risk assessment (shall) not be
as the risk is also larger.
financial sector and allowing insurers to
fixed but based on risk exposure by the
invest in bonds issued for financing in-
insurer".
IRDAI nod not needed for frastructure and affordable housing
The guidelines come as the regulator is over their financial sector investment.
issuing preference shares,
preparing the ground for a larger expo-
Infrastructure and housing are ex-
subordinate debt sure of foreign companies and a wider
pected to be big investment drivers in
range of domestic financial sector com-
In a bid to promote ease of doing busi-
the current year. Giving insurers more
panies to enter the sector. Globally, all
ness, insurance regulator IRDAI has
headroom to invest in long-term bonds
regulators are upping the ante on these
decided to do away with the prior ap- issued by banks will enable a better re-
risks.
proval requirement for raising capital
turn for policyholders. The regulator
through preference shares and subor- also aims to relax the dividend criteria
dinate debts by insurers. IRDAI allows insurers to for investment in equities and prefer-
The decision was taken in the board ence shares under 'approved invest-
empanel hospitals
meeting held recently, sources said. ments', which will give room to invest
In a bid to enhance the scope for offer-
in new age companies.
As per the decision, the issue of Other ing cashless facility in health covers
Forms of Capital (OFC) should not ex- across the country, IRDAI has now al- According to insurance officials, the new
ceed 50 per cent of the paid-up share lowed the insurers to empanel the hos- IRDAI chairman, Debashish Panda, has
capital or net worth of the insurance pitals that meet the standards and given growth targets to insurers and is
company. benchmarks criteria as specified by their facilitating this through reforms. Distri-
bution reforms include allowing corpo-
The board has also done away with the boards.
rate agents (which include banks) to tie
prior approval requirement for exercis- While specifying the requirements, the
up with nine insurers each in life, gen-
ing the call option under OFC subject to a board of insurers, among other things,
eral and health. Currently, corporate
solvency ratio not less than 180 per cent. should consider the minimum man-
agents can sell products of three com-
power and healthcare infrastructure
panies in each segment.
Insurance regulator tight- facilities, IRDAI said. The insurers have
There is also a proposal to allow insur-
to also publish the board approved
ens anti-money laundering ance marketing firms to tie up with six
empanelment criteria in their website
rules from time to time. While empanelling insurance companies in each segment.
IRDAI has stiffened the anti-money network providers for cashless facility,
IRDAI issues draft notifica-
laundering rules as part of consolida- insurers are also advised to focus on the
tion of the guidelines for the sector. delivery of quality healthcare services. tion on rules limiting ex-
The rules issued to consolidate and up- Sharad Mathur, MD & CEO, Universal penses of life insurance
date guidelines on anti-money launder- Sompo General Insurance, said, "This
companies
ing replaces the assorted norms issued regulatory initiative would increase the
since 2013. The key change is that ex- scope of the insurers' cashless services After health and general insurance
emptions and relaxations from the which would play a pivotal role in re- companies, the Insurance Regulatory
guidelines for companies have been ducing the financial burden on policy- and Development Authority of India
done away with. So no life, general, or holders. This will also provide a strong (IRDAI) has issued a draft notification
The Insurance Times, September 2022 9