Page 14 - Insurance Times December 2022

Addressing the BimaLokpal day, Panda consolidate our shareholding in Max cap on EoM for the general insurance
emphasised on three As -- awareness, Life, which will benefit all our sharehold- companies in the exposure draft issued
accessibility and affordability -- as well ers by attracting more investor inter- on August 1.
as new technology platforms -- beema est," said Max Group chairman Analjit
The regulator has streamlined the ex-
sugam and beema bharosa portal -- in Singh.
penses of management (EoM) guidelines
this respect.
for insurance companies, now propos-
The Insurance Regulatory and Devel- IRDAI unveils new draft on ing a blanket cap on EoM to the extent
opment Authority of India (Irdai) chair- of 30 per cent of gross written premium
expenses
man highlighted the huge potential of in India for general insurance companies
The Insurance Regulatory and Devel-
insurance in the country and and 35 per cent for standalone health
opment Authority of India (IRDAI) has
emphasised the need for the Insurance insurance companies.
announced a revised exposure draft on
Ombudsman to be fair and equitable.
the expenses of management (EoM) for
IRDAI relaxes PE invest-
the non-life insurance companies and
Max gets IRDAI nod to buy
proposed the removal of caps on pay- ment, solvency norms
out Mitsui in life co ment of commission to insurance agents
The board of the Insurance Regulatory
Max Financial Services (MFSL) has re- and intermediaries. and Development Authority of India
ceived insurance regulator Irdai's nod
It has also proposed a revised 30 per cent (IRDAI) approved a host of proposals,
to acquire the residual 5.2% in Max Life
and 35 per cent caps on EoM for general involving private equity investment,
Insurance from Mitsui Sumitomo.
insurers and standalone health insurers, solvency norms, dilution of equity and
Max Financial will now buy 9.9 crore respectively, after taking into consider- fund raising, aimed at promoting ease
shares of Max Life at Rs 85 each, which ation the insurance industry's views. of doing business and simplifying the
is in line with the put/call option ap- process of setting up an insurance com-
In the earlier exposure draft, released
pany. The regulator has allowed the
proved by the MFSL shareholders. The
on August 23, it had proposed to put a
promoters to dilute their stake up to 26
transaction is expected to be concluded lower cap of 20 per cent on commission
per cent, subject to condition that the
in the next fortnight.
paid to the agents and intermediaries
insurer has satisfactory solvency record
"The transaction will make the holding of both non-life and life insurance com-
for the preceding five years and is a
company structure simpler and help panies. It had proposed a 30 per cent
listed entity.
After the board meeting in Hyderabad,
IRDAI chief meets insurance CEOs to review indus-
IRDAI said investment through special
try performance purpose vehicles (SPVs) has been made
IRDAI chairman Debasish Panda met CEOs of general insurers, including optional for private equity (PE) funds
health insurers, in Mumbai recently to review the performance of the indus- enabling them to directly invest in in-
try and seek ideas from the industry leaders to improve insurance penetra- surance companies, providing more
tion in the country. flexibility. The IRDAI move is expected
to bring more PE funds into the insur-
Like earlier meetings, titled 'Bima Manthan' where Panda had met CEOs of
ance sector.
the entire industry, with elaborate agenda, there was no pre-set agenda for
the meeting and select CEOs of general insurance industry, mostly Mumbai Further, subsidiary companies will be
based, were invited for it. allowed to be promoters of insurance
companies, subject to certain condi-
"This meeting was for general update and to review general industry perfor-
tions. Investment up to 25 per cent of
mance in terms of growth, loss ratio, claim settlement ratios, initiatives taken
the paid-up capital by a single investor
by the IRDAI in the last few months and as an industry what else can be done
(50 per cent for all investors collectively)
to improve penetration and market growth,'' said the CEO of a company who
will now be treated as 'investor' and
had attended the meeting.
investments over and above that will
The discussion had focused on penetration and what all is required from the only be treated as promoter.
regulator to push reforms in the industry, said the CEO of another company.
Earlier, the threshold was 10 per cent
"Emphasis was on how we can provide more products and distribution reach,"
for individual investors and 25 per cent
he said.
for all investors collectively.
The Insurance Times December 2022 13