According to Insurance Regulatory and Development Authority chairman N Rangachary, the company had approached the regulator earlier this week. He said it would be floating separate company.
He also announced that the authority intended to switch to risk-based capital accounting, “if not in 2003, then positively by 2005”. That would have implications for solvency margins, he explained, since the capital would then be related to the liabilities carried by an insurer.
He was delivering the valedictory address at the fourth Ficci-Actuarial Society of India conference of actuaries here on Friday.
Mr Rangachary said Irda had decided to follow the British pattern of accounting since the Life Insurance Corporation had been practising the same for decades. It had therefore preferred to effect a transition slowly. To move the process forward, he said, a meeting on the matter would be convened in the next two months.
The deliberations would also cover the fair-value accounting system laid down in the regulations, Mr Rangachary added.
Earlier, joint secretary in the finance ministry Ajit Sharan exhorted general insurance companies to move into the actuarial mode. The practice so far has been to try improvisations because non-life products were short-term commitments.
He also advocated more actuarila inputs for crop insurance and health insurance.
Interestingly, the move by Max India assumes significance for the health insurance sector. In 1997 then finance minister P Chidambaram had proposed that to partly liberalise the insurance sector, private participation should be allowed in health insurance and pensions.