MoF asks PSU non-life insurers to streamline accounting systems

Harjeet Ahluwalia

New Delhi, Oct 14: The non-life public sector insurers have been told to streamline their reporting systems in order to strategise their businesses well in time each year. To begin with, it has been decided that half-yearly audited accounts should be put before the boards by November.

The finance ministry is said to have taken a stern view of the fact that the companies at times finalise their annual performance almost half-way into the next year.

Indeed, the 2000-01 results of the four companies — New India Assurance, United Insurance, Oriental Insurance and National Insurance — came in only last month, and cannot be made public before being tabled in the Parliament first, which will now be only in the winter session next month.

The ministry has stressed that lessons from the previous balance sheet need to be drawn and assimilated into the business plans of the current year. Planning of an actionable course during the year can be difficult if the accounts are not hand, it has pointed out. On the contrary, though, senior officials pointed out to The Financial Express, it may become necessary to seek the ministry intercession for relaxing the deadlines this year onwards, the insurers would have to conform to the Insurance Regulatory and Development Authority (IRDA) regulations anyway, which would brook no delay otherwise.

While the companies conceded the need to expedite the appointment of statutory auditors, they have cited a number of factors affecting reporting real-time.

Chief among these were delays in audit of consolidated accounts by
the Central auditors and in getting reinsurance returns at the headquarters from the operating offices, tardy submission of details by other companies of the reinsurance premium and claim figures and also from the General Insurance Corporation (GIC).

While the Centre and the regulator were pinning hopes on computerisation of operations in the public sector units, the ground
reality was that employees and systems in far-flung areas remain insulated from the modernisation drive.