A committee constituted by the Irdai has suggested host of changes in the life insurance sector, including in the investment norms to improve the returns generated by the funds, reported PTI. The insurance regulator had notified the IRDAI (Non- Linked Insurance Products) Regulations, 2013 and IRDAI (Linked Insurance Products) Regulations in February, 2013. However, it was observed that there is a need to review the regulations due to changing market and economic environment, Insurance Regulatory and Development Authority (Irdai) said. In January this year, it constituted an eight-member committee to make recommendations on the amendments required in the regulations. Here are the three major suggestions:
1) The committee in its report among other things has recommended that the investment norms “should undergo significant change” with a view to improving the returns generated by the funds while taking account of the risks inherent in the various asset classes.
2)The panel has suggested to “lower the mandatory proportion of ‘G-Secs’ in the Life Fund and the Pension and General Annuity Funds and allow for higher exposure in alternative higher-yielding assets (like equity or property) or high rated corporate bonds” to help insurers generate a high gross return on investments so that insurance savings products can compare favourably in the financial savings space.
3) The report, on which Irdai has sought comments till December 28, further said along with existing avenues like NPS, EPF,PPF, multiple other avenues will be required to reach the untapped working population.
With PTI inputs