Satwalekar calls for regulatory changes

Font Size

Print

Feedback

Email

Discuss

Related Articles

Green energy attracts global players'Millionaires to rise in India despite slowdown'3 banks raise non-resident deposit ratesCentre sends out 11.5% rate signal

Mumbai, Nov 12: Deepak M Satwalekar, MD & CEO, HDFC Standard Life Insurance, has called for regulatory changes to facilitate product innovations in the liberalised domestic life insurance industry.

Satewalekar who has been heading HDFC Standard Life Insurance since the last eight years (ever since it was set up) is calling it a day on Thursday. He has suggested a shift in regulatory frame-work in the product approval process from ‘file and use’ to ‘use and file’ method to benefit the life insurance industry.

“With eight years of experience, my suggestion to the insurance regulator would be that we can move to an era of ‘use and file’, from the existing method of ‘file & use’. So, insurance companies can come up with innovative products that customers want. Insurers can launch them and then file a copy of that product with the regulator. All that the regulator should do is to check whether there is any violation of code by the insurers.”

Under the existing ‘file & use’ system the insurers first file the product with the regulator and can launch them once they receive approval from insurance regulator, Insurance Regulatory & Development Authority(Irda).

On the issue of new customers being reluctant to buy unit linked insurance plans (ULIP) because of ongoing market volatility, Satwalekar said, “We continue to see a huge request for ULIPs as over 90% of our total sales are from this segment. If the same trend continues, over 60-65% of the new premium that we get is targeted at our equity funds which is the right thing to do.’’

According to him, ULIPs also provide customers the ability to participate in the long-term games in the stock market.

“In this period of market correction, we have seen people moving out of equities into debt. So, these are knowledgeable investors, who understand and move out. But new people are coming into equities at this low level. Because they believe that this is the right time to enter in a long-term scenario.”

Satwalekar predicted that a consolidation may happen in the domestic life insurance industry.