Insurance Regulatory and Development Authority of India (Irdai) is looking into the area of private equity firms investing in insurance companies and might take some decision in next one month.
Insurance Regulatory and Development Authority of India (Irdai) is looking into the area of private equity firms investing in insurance companies and might take some decision in next one month. Insurance regulator has also formed a committee on introducing risk-based solvency in the insurance industry. Speaking at the ASSOCHAM Global Insurance Summit event, TS Vijayan chairman of Irdai said, “In insurance companies, we look at it in two different ways, investors and promoters, anybody can invest in the company, for promoter, we are studying (as to) what is the feasibility, if at all somebody is coming what are the conditions that need to be in place. We have put a team, we are legally examining it and we will take a decision in a month.”
He also informed that Irdai has though just formed a committee for risk based capital model but gave no deadline for its introduction. “In Irdai we have things like 150% of solvency margins irrespective of numbers etc, we are trying to move towards risk-based capital model, we have started forming a committee and have started discussion, it will take time as it is not an overnight type of thing, it will take time,” said Vijayan. Several insurance companies have lined-up their initial public offer (IPO) and in the next few months we can see companies like New India Assurance, General Insurance Corporation of India (GIC Re), HDFC Life among others.
Vijayan also added that, “There are more than 50 companies. It will be good if all the companies are coming to the market, but nobody can force do so.” Recently ICICI Lombard General Insurance and SBI Life completed their IPOs. Pradhan Mantri Fasal Bima Yojna (PMFBY) which was a big hit last year and had collected premiums of over R20,000 crore, but Irdai feels that such schemes cannot be evaluated in one single year. “PMFBY was a big success and has increased the insurance penetration to a great level. These types of schemes cannot be evaluated in one single year. So, it needs building up of resources, reinsurance support and evaluation of the extent of damages. It is a good starting point and has produced good result and going forward it will be catching up again,” concluded Vijayan.