Page 12 - Insurance Times December 2015 SAMPLE
P. 12
IRDAI
News
IRDA: Govt should drop IRDA forms panel for transparency in motor insurance
tax on insurance matu- Insurance regulator IRDAI set up a made to the auto dealers by the insur-
seven-member committee to suggest ers for getting motor insurance busi-
rity proceeds ways to bring transparency in payouts ness" while announcing setting up of
made to the auto dealers
Insurance regulator Irda will take up by the insurers for getting the panel.
with the government the issue of 2 motor insurance business.
per cent income tax deducted at The panel will study the
source (TDS) by life insurers from The committee would be "existing practices in the
maturity proceeds, a senior official headed by a senior official industry on the payouts
said. of IRDAI and will comprise made to the motor dealers
members from insurance on motor insurance busi-
The tax has been imposed on life in- companies and auto industry. ness" and also "examine the devia-
surance products only, and hence tions from the existing norms". The
Irda has favoured its removal to The IRDAI said it "proposes to bring committee has been "advised" to sub-
bring parity of such plans with other clarity and transparency in payouts mit its report within two months.
financial instruments.
India to control 49% of foreign ownership: IRDA
"Out of various gross domestic sav-
ing (GDS), which comprises financial The Insurance Laws (Amendment) Act, the chief executive officer by foreign
instruments like MF and insurance, 2015, passed during Parliament's bud- investors, provided such appointments
it is the life insurance products only get session, allowed insurance compa- are approved by the board, which
nies to raise their foreign ownership must have a majority of directors that
which are taxed from 26% to 49%, with the requirement are the nominees of Indian promoters
on maturity. This that the company be Indian owned and or investors.
was not justified controlled.
keeping in view "Now that Irda has clarified
the fact that in- IRDAI said the majority of di- the management controls,
surance is a 'pull' rectors, excluding indepen- the process of approving for-
product," Irda dent directors, will have to be eign direct investment (FDI)
Member (life insurance) Nilesh Sathe nominated by Indian promot- hike will be quick," said
said here. ers or Indian investors. According to the Anuraag Sunder, director, in-
guidelines, even the appointment of key surance, PwC India. "FDI hike has to be
The watchdog will take up the issue management persons that include chief approved by the Foreign Investment
with the government and push for executive officer, managing director or Promotion Board (FIPB) first, then the
removal of the tax, he told report- principal officer in case of an insurance Competition Commission of India (CCI)
ers on the sidelines of CII Financial broker will have to be through them or and, ultimately, Irda.
Distribution summit. Moreover, the board of directors.
Sathe said, the 21 lakh agents work- According to Sunder, when the sector
ing for the insurance sector need to The guidelines, however, allowed for opened up to private insurers, Indian
be incentivised through commission. the nomination of key persons except promoters didn't have the expertise to
run the insurance business.
8 The Insurance Times, December 2015
Copyright@ The Insurance Times. 09883398055 / 09883380339
