New Delhi, Sept 3:The government would soon come up with reinsurance norms for life insurance companies, Insurance Regulatory and Development Authority (IRDA) chairman N Rangachary said on Sunday. "The authority would come up with 4-5 clauses pertaining to reinsurance of policies by life insurance companies within a week's time," Mr Rangachary said after a function at Birla Institute of Management Technology. The new norms would lay down rules for life insurance companies registering with the regulator to reinsure a portion of their policies with companies handling exclusively reinsurance business in a bid to reduce their risk. "Unlike non-life insurance, where the assets could be valued, life insurance would require strict conditions while assessing policies and premium," the IRDA chairman said.Till now, the country's only Life Insurance Corporation (LIC) reinsures a portion of its assets with General Insurance Corporation (GIC) and also with Switzerland-based reinsurer Swiss Re. Mr Rangachary said the regulator would also come up with norms laying down policy-holders rights and obligations within this fortnight.
"The rights and obligations of consumers should be matched by the insurance companies' ethics on the matter of advertisements and publicity," he said.Ads issued by companies and the types of disclosure in the prospectus would pass through lenses of IRDA, he added. Mr Rangachary said government will also notify guidelines onbrokers and surveyors by this month. The government had earlier notified 12 set of guidelines including those pertaining to life and non-life insurance, reinsurance for non-life, accounting, investment, rural and social sector obligations for the insurance players.
"Prices of insurance policies is expected to come down considering the interest of the public with increasing number of companies applying for insurance licence," Mr Rangachary said.
New insurance companies would have to file application for launching a new product with the regulator although IRDA would not interfere in the pricing of the products. The insurance sector, he said, is one sector which is under a regulated regime in every part of the globe. "It will be a 'litmus test' for the Indian insurers as well as the regulator," he said referring to the fast developments in the coming months.
Till date, seven companies have applied for insurance - Dabur-Allstate, Prudential-ICICI, Reliance Industries and HDFC-Standard Life, Sundaram Royal & Sunalliance, Max India-New York Life and Kotak Mahindra-Old Mutual.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.