After imposing cap on the commission of unit-linked insurance products( Ulip) products, insurance regulator Irda is planning to impose similar cap on the traditional products, too.
Irda chairman J Hari Narayan, while speaking to FE on the sidelines of Ficci Insurance Summit in Mumbai on Tuesday, said, ?We now want a cap on commission charges for the traditional insurance products. But, we will think of doing it only in case we find that the same has gone well for the Ulip products, which was implemented , since the beginning of the current calendar year. ?The move to cap the commission charges on Ulip products would help the customers. Once the customers are happy, it obviously helps the insurers,” he said.
Irda is also planning to come out with IPO guidelines for insurance companies by the end of next month, hinted Narayan. ?We are awaiting Institute of Actuary?s guidance note on economic capital calculation,? he said.
Talking about the permission for the use of derivatives for the insurers, the demands for which are being raised by the insurers for long, Narayan said it can be allowed only when Irda finds the investment processes are in place by the insurers well.
?We want insurers to sell more and more products. But, when it comes to investing in derivative products by the insurers, the insurers will have to make their risk assessment side different. They will have to ensure how well can they maintain three-way water-tight compartment. Otherwise, it would be difficult for them to go for investing in derivative products. If all goes well, then we can allow the insurers to go for investing in derivative products by the end of the current calendar year,? said Narayan.
On business growth, he said in the insurance sector is likely to be better in both life and non-life sectors. Irda expects the growth in total premium in the life insurance sector to be at 13% for the current fiscal, as against the marginal growth of 1-2% for the sector during last fiscal.
On the health insurance portability, Narayan said the delay was basically caused due to the insurers? unwillingness to share the informations about their policyholders in case they transfer their policy from one insurer to another.
