The Insurance and Regulatory Authority of India (Irdai) will come out with the final commission structure in its forthcoming board meeting scheduled in October. The insurance regulator is also confident that by the start of the next calendar year, global re-insurers might become operational in India.
Speaking at the Assocham 9th Global Insurance Summit in Mumbai, Irdai chairman TS Vijayan said, “I believe in the next board meeting which is slated for October, we will be able to finalise the commission structure. Since the draft was out on the issue, we have discussed all the points with all the stakeholders and we have taken it to the Insurance Advisory Council to look into suggestion which finally go to the authority. However, at this point of time, I can’t say what point would be included in the final guidelines.”
Apart from the commission structure, Irdai is also looking at taking a decision on providing second stage of licence (R2) to global re-insurers in the board meeting. “There are five-six players that have approached Irdai and I think by January 2017 some of them will start coming in. I think R2 will be given in the next Irdai board meeting and they (foreign reinsurers) have to bring in capital to start working,” Vijayan said.
As of now, state-owned GIC Re is the only re-insurer which is fully operational within the country. There are three levels of licences to be issued by Irdai to foreign re-insurers to start their operations. They have already got the R1 licence and are now awaiting R2 and R3.
In August, Irdai had come out with the discussion paper on ‘Listing of Indian Insurance Companies’ which mandates these firms to list. However, Irdai chairman made it clear that it will take some more time for the regulator before it brings in the exposure draft on this issue.
“We wanted to have a discussion on this subject, so we brought out the paper. Insurers have expressed that they want to see how that goes forward. We have not come to the stage of exposure draft…,” said Vijayan.
During the event, a special address was delivered by SK Roy, chairman of LIC. He said this is the best time for the life insurance industry. “Current financial year has seen fantastic growth by the life insurance industry. LIC’s new business premium in August grew by more than 92%.
This is the kind of growth which we yearn for long but have seen very rarely. So, definitely this is very good time to be in the life insurance industry.”