Page 11 - Life Insurance Today January 2018

circular requires all
insurers to comply with
the Ind AS for financial
statements for accounting
periods beginning on or
after 1 April 2018, with
comparatives for the
periods ending 31 March
2018. Early adoption is not
permitted. Ind AS will be
applicable to both
separate and consolidated
The insurance framework in India needs to be made more financial statements. Even after permitting private players,
robust with global best practices serving as benchmarks, the attitude of the regulator was more socialistic as it
with due localisation. The regulator, IRDAI, must create an controlled prices and paid the claims out of a pool of
inclusive insurance and a digital economy, and must resources created from the premiums collected by all the
become an enabler - through the regulatory set up and companies based on a defined proportion.
forward looking regulations for the Indian insurance
The worst among them was the claims from third parties
market to tap technology led disruptive changes. It is time
in the case of an accident involving an automobile. The
to transform - in thoughts and actions. There is a need for
lack of profitability and the underwriting disciplines means
coalition building, specialised knowledge, less hierarchy,
that the risk mitigation is not attended to, the right talent
more collaboration, and flatter professional structures.
is not attracted and worse there is no research spends into
lowering the risk thresholds - both for the traditional and
The regulator also has to be the change agent for full
vertical alignment, from the fundamental philosophy of emerging risks. The short-term approach taken by the
market is, however, not getting corrected by the IRDAI in
insurance to modern regulatory practices, and finally with
spite of occasional attempts. At the same time, capital
the insurance industry delivering efficient services to the
Indian insurance market. The changes cannot be held up accumulation is not enough to fund more growth.
Paradoxically, the below par performance of the insurance
for long as India's share of the global economy is set to
firms means that fresh capital is not easy to get - either
increase. India also needs to prepare to become a regional
internal accruals, public listing or external borrowing or
centre of excellence for (re)insurance for the markets
equity - all of which demand greater control and improved
across Asia and Africa, as the balance of economic power
performance. This becomes a vicious cycle. India continues
is moving from West to East.
to be poorly and inadequately penetrated, that is still a
question mark on the leadership of the IRDAI.
The essential object must be to prepare and promote the
ease of doing insurance business in India, and the References:
regulatory agenda needs to be development oriented led
1. IRDAI Annual Report 2015-16 ( Data contents)
by prudential regulations with conduct regulations pitching
2. http://www.financialexpress.com/market/cabinet-clears-
in as bulwarks. The insurance regulator needs to step up
stake-sale-in-psu-general-eyes-rs-23000-cr/513320/
to the plate to craft a modern, transparent and progressive
3. http://www.business-standard.com/article/finance/
industry framework and a global (re)insurance platform.
consolidation-era-set-to-begin-in-insurance-sector-
Insurance bundling on e-commerce platforms has enabled
116061701057_1.html
greater customisation in product and pricing, thereby,
targeted marketing to customers. 4. http://economictimes.indiatimes.com/wealth/insure/
senior-citizen-health-insurance
IRDA through its order on 17 November 2015 stated that 5. http://www.policyholder.gov.in/
the insurance sector in India would be converging with indian_insurance_market.aspx
International Financial Reporting Standards (IFRS). This 6. Newspapers & Journals

Life Insurance Today January 2018 11

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