Page 13 - Insurance Times May 2023

maximum limit for other individual cat-
Pump in more capital to support growth: IRDAI chief
egories is 80% of the year 1 regular pre-
IRDAI Chairman Debasish Panda has asked insurance companies to augment
mium, and a ceiling of 15% is provided
their capital base in order to support the fast pace of growth expected for the
for deferred annuity products.
insurance sector.
"I would like all of you to go to your boards and think in terms of augmenting
IRDAI gives a boost to in-
your capital, because, going forward, we expect growth will be speedier than
novation with monthly re-
before, hence, more capital will have to be pumped into the sector," Panda
view of products said at the FICCI Insurance Summit.
In a major boost to innovation in insur- "The investment landscape is also being rebuilt to attract more investment
ance, the insurance regulator will re- through the FDI route. The limit has been enhanced to 74 per cent from 49 per
view innovative and experimental prod- cent. Companies which have a foreign partner should look at this opportunity
uct filings every month and approve to bring in more capital and grow even faster than they have been growing."
them without delay. This is part of the
In this regard, the shift to a risk-based capital regime from the current factor-
reforms the regulator has brought in
based solvency regime, and the ongoing shift to IFRS (International Financial
norms pertaining to Regulatory Sand-
Reporting Standards) will also help the industry in efficient use of capital and to
box, which were originally introduced
establish a real-time risk profile.
by the IRDAI in 2019.
Regulatory sandbox refers to live test-
ing of new, innovative products in a con- mode at least once in a month or as the government's social schemes pro-
trolled regulatory environment, backed may be required to look into applica- viding health insurance nor do they have
by relaxation of certain norms by the tions and related matters as per a noti- employers' or private health insurance.
IRDAI for the limited purpose of test- fication. "A large section of the population - the
ing. The objective behind this approach
Given the fact that the first cohort of missing middle - still has no coverage
is to identify innovative ideas to foster under health insurance. What the in-
the regulatory sandbox in pre-covid
growth in the insurance sector. surance solutions are is something that
times got a massive response of over
However, till recently, the process was 125 products when it was introduced, we need to work out. We have already
not perpetual and based on a notifica- the present move by IRDAI to have a appointed a committee which is work-
tion by the regulatory for a specific pe- perpetual and regular mechanism is ing quickly, you should work out your
riod of time followed by review. expected to encourage and speed up strategy," said IRDAI chairman Debasish
innovation, according to a senior offi- Panda. He was addressing insurance
But now, the process has been made
cial of IRDAI. companies at FICCI's 22nd Annual In-
perpetual, as the norms have been
surance Conference in Mumbai.
amended to allow insurers/intermedi-
aries to experiment on an ongoing ba- Report on health cover for Speaking at the event, HDFC Ergo MD
sis by increasing the experimentation & CEO Ritesh Kumar said there was an
'missing middle' soon:
period from six months to up to 36 opportunity for insurers to extend
IRDAI health insurance with OPD (outdoor
months, and moving from the existing
batch-wise (cohort approach) clear- IRDAI has said it will soon come out with patient department) cover. He said the
ances/approvals to clearances/approv- its report on covering the 'missing challenges were the 18% goods and
als on a continuous basis. A provision middle' in the country under health in- services tax (GST) on the premium and
for review of rejected applications has surance. The regulator has asked the the huge volumes that would be gener-
also been introduced. industry to be prepared to move quickly ated. "OPD covers will have to work on
with insurance solutions required for this networks and cashlessly," he said.
A special committee formed by the
segment.
IRDAI with experts in digital banking of According to GIC Re Chairman & MD
SBI, RBI and industry which will be The 'missing middle' in the insurance Devesh Srivastava, the need is to have
chaired by a member of IRDAI. The industry refers to the 40-50 crore simple, flexible products that can be
committee would meet in a hybrid people who are neither covered under expanded as the requirement and the

The Insurance Times May 2023 13