Irda asks insurers to control costs, eliminate rebates

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Mumbai, April 8: The Insurance Regulatory Development Authority’s (Irda) chairman CS Rao asked the insurance companies to control cost and disallow rebating to provide better service to the customers.

Mr Rao who was inaugurating the opening of the office of the Life Insurance Council in Mumbai on Friday asked the insurers to be transparent in their products as the proliferation of products in the market has created confusion in the minds of the customers.

The insurers have a large agency force which need to be trained properly to prevent mis-selling of products. ‘‘I would like some self-regulation on the part of the industry to prevent indisciplined in the market,’’ he said.

Earlier, Mr Rao delivering the key-note address at a seminar organised by Indian Merchant Chambers assured that the entry of foreign players in the insurance sector will not affect the growth of the public sector entities., He explained, “As the total size of the cake itself has increased, entry of new players will not cause a reduction in the market share of existing players.”

Even with respect to a possible hike in FDI to 49%, Mr Rao opined that “it will ensure a greater commitment towards health insurance.”

Citing health and motor insurance as the emerging segments under insurance, Mr Rao said he anticipates a growth of 10-15% in the health sector.

Further, Mr Rao voiced concerns over the imposition of tax on insurance business as they are akin to long-term saving.

“This issue has been taken up by the life insurance and general insurance councils with the government on devising an appropriate way of tax system,” he said.