Irda sets up cell for insurance Act changes

New Delhi, Jan 2: The Insurance Regulatory and Development Authority (Irda) has set up a ‘research & business development’ cell to look into the amendments to Insurance Act of 1938 and other regulatory aspects.

"The insurance regulator has formed a ‘research & business development’ cell to take up various issues including the amendment to the Insurance Act," official sources told PTI here on Wednesday. Irda is likely to take up various aspects of the old Insurance Act of which the main focus would be on the investment norms, sources said.

In a recent presentation to Irda, the Asian Development Bank had pointed out some of the lacunaes of the old Act and suggested changes. Irda members, however, declined to divulge details. Apart from investment norms, many other provisions of need to be changed in order to make the Indian insurance sector at par with those of developed nations. The research and business development cell would also look into a host of other activities including strengthening of regulatory functions, sources said.

The move comes after finance minister Yashwant Sinha’s emphasis on further reforms in the insurance sector. Irda’s future course of action would be to strengthen regulatory system, develop a code of good practices, improve corporate governance and financial accountability, ensure high solvency margins of companies, ensure timely and reliable data while strengthening market structure.

Irda is already in the process of including some of the norms on code of good practices as suggested by International Association of Insurance Supervisors (IAIS) within the proposed policyholders protection rules. The rules would ensure that insurance companies educate the consumers about their rights.

— PTI