Page 11 - Insurance Times June 2024

tional Holdings (IIHL) has received the IRDAI goes to grassroots, mandates life and health
long-awaited nod from the Insurance
Regulatory and Development Author- cover down to Gram Panchayats
ity of India to acquire Reliance Capital. In a move to take insurance down to the grassroots, IRDAI has mandated life
The acquisition will include the takeover and general insurers to extend cover to certain identified Gram Panchayats.
of Reliance Capital's insurance arms - Per the master circular issued by the regulator on rural, social and motor
wholly-owned subsidiary Reliance Gen- third party obligations, the Life Insurance Council, in consultation with the
eral Insurance and the 51:49 Nippon Life Ministry of Panchayat Raj, will indicate the minimum number of Gram
JV Reliance Nippon Life Insurance. Panchayats each life insurer will cover on mutually agreed parameters such
The insurance regulator cleared the as market share.
transfer of Reliance Capital's 26 per cent Once the number of Gram Panchayats to be covered by each insurer is deter-
stake in Reliance Nippon Life to Aasia mined, the insurers can identify them in a State(s) of their choice for fulfilment
Enterprises. Post the transaction, Reli- of obligations, the IRDAI said.
ance Capital, Nippon Life Insurance and A similar exercise will also be taken up by the General Insurance Council to
Aasia Enterprises LLP will be the pro- identify the Gram Panchayats for extending health cover, Motor Third Party
moters of the company.
(MTP) insurance and cover for dwelling shops, per the new norms.
The approval is valid for three months The insurers will have to put in a mechanism to identify, record, coordinate
and subject to certain "regulatory,
and exchange information on the number of lives/persons/ vehicles covered
statutory, and judicial clearances/com-
by life and general insurers in each Gram Panchayat. "To achieve the goal of
pliances". Further, the IRDAI has also
full saturation of the Gram Panchayat, the insurance companies should work
sought details of the share transfer post in close coordination with the Gram Sarpanch and Gram Sachivalya," the
the completion of the acquisition.
insurance regulator said.
The approval has been long pending
and crucial to the resolution plan given opened up the market in August 2000
that the insurance arms are the high- with an invitation for application for IRDAI asks insurers to put
est revenue-earning businesses of Reli- in place board-okayed
registrations. Foreign companies were
ance Capital.
allowed ownership of up to 26 per cent. policy to ensure fair com-
The Authority has the power to frame
IRDAI marks 25th anniver- regulations under Section 114A of the mission for agents
sary with slew of regula- Insurance Act, 1938 and has, from 2000 The Insurance Regulatory and Devel-
onwards, framed various regulations opment Authority of India (IRDA) has
tory reforms ranging from registration of companies directed all insurers to have a
As IRDAI enters the Silver Jubilee year, for carrying on insurance business to boardapproved policy on commission
the regulator is busy creating a smooth protection of policyholders' interests. structure for insurance agents to en-
ground for a slew of regulatory reforms sure fairness and reasonable payments.
In the last 24 years, IRDAI steered the
announced in March that come into industry on the growth path in the post- In the master circular on expenses of
effect from the current financial year. reforms era, with life and nonlife insur- management, including commission, of
This is even as the industry players are
ance registering a premium income of insurers, 2024, the insurance regula-
also buckling up to play their part. Rs. 7.83lakh crore and Rs. 2.57-lakh tory said: “As the insurance agents, in-
Following the recommendations of the crore in 2022-23. In 2024, it is expected termediaries or insurance intermediar-
Malhotra Committee report, the Insur- to clock 13-16 per cent growth in these ies play a crucial role in the distribution
ance Regulatory and Development Au- two segments, while the final figures of insurance products, it is essential for
thority (IRDA) was constituted in 1999 are yet to be released. the insurers to have a clear and trans-
as an autonomous body to regulate and According to Rakesh Jain, CEO of Reli- parent board policy on their commis-
develop the insurance industry. It was ance General Insurance, over the past sion structure to ensure fairness, trans-
incorporated as a statutory body on two decades, IRDAI has played a pivotal parency, compliance, efficiency and in-
April 19, 2000. role in safeguarding consumer interests dustry reputation in the insurance dis-
Later, renamed IRDAI, the regulator and propelling industry advancement. tribution process.”

The Insurance Times June 2024 11