IRDA bullish about the deregulation of the insurance sector

Mumbai, Sep 19 (UNI) The regulatory body of the country's insurance sector, Insurance Regulatory Development Authority (IRDA) is bullish about the detariffing of the sector which is likely to come into force from January 1 next year.

Talking to media on the sidelines of third national convention of Insurance Brokers Association of India (IBAI) which began here this morning, the IRDA chairman, CS Rao, said that in case the deregulation of the sector was implemented on January 1 next year, it would kill two birds with one arrow.

First, it would enable the ever growing insurance market to determine the rates of various insurance products by its own.

Secondly, it would pave the way for the beginning of the much awaited customization of insurance products in a way or the other, he said. A committee, set up by IRDA, was looking into it and was likely to submit its report by the October-end, he informed.

Also, the IRDA was under the process of framing a set of guidelines for those involved into the sector. The guidelines, once implemented, would act as the code of conduct for each and every person who was concerned in the insurance sector, said Mr Rao.

Asked why not a single foreign firm has applied before the IRDA for Reinsurance so far despite the fact that it is five years now when the sector was thrown open to them, Mr Rao cited two reasons behind it. While 26 per FDI norm, which was still awaited into the sector, the requirement of a capital of Rs 200 crore was too small to interest them, he said.

Talking about the IPP (insurance premium as percentage), Mr Rao said that it has already improved in the country within past five years. The figure, which was merely 0.9 per cent five years back, has touched the mark of 3. However, he hoiped that the figure would cross the mark of five within next five years as the sector was likely to witness the arrival of few more MNCs into the sector in India.

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