Chennai, Aug 30 (IANS) India’s insurance regulator has asserted that it has complete autonomy with regard to supervision and regulation of the sector in general and companies and intermediaries in particular, and is planning to put in place early warning signals (EWS) for important insurance groups.
The regulator also says it has complete oversight on the government owned Life Insurance Corporation of India (LIC) with regard to market conduct and prudential regulations.
In a statement issued late Thursday, the Insurance Regulatory and Development Authority (IRDA) refuted some of the observations made in the International Monetary Fund (IMF) and World Bank study on the Indian insurance sector.
The IMF-Bank study was on the sector’s adherence to Insurance Core Principles (ICP) of International Association of Insurance Supervisors (IAIS) in 2011 made public early this month.
The study frowned upon the government guarantee given to the policy holders of LIC and said that it would be a useful sales aid only during a time of global uncertainty.
According to IMF-World Bank study, ideally the guarantee should be removed, but given political and industrial realities an alternative would be to require LIC to include the value of this guarantee in its product pricing.
The study also said that the IRDA is following the “name and shame” practice of penalising the insurers by putting up their names on its website as the available financial sanction powers are outdated.
According to IRDA, the concerns expressed in the study on valuation of non-life insurer’s liabilities are being addressed by strengthening the stipulations for provisioning for incurred but not reported, and incurred but not enough reported liabilities/claims.
