Irda to make suggestions on Insurance Bill

The Insurance Regulatory Development Authority (Irda) would make suggestions vis-a-vis the proposed insurance bill to cover different areas like health insurance and e-commerce, Irda Chairman T S Vijayan said in Hyderabad on Friday.

“We have a number of suggestions and would be placing them before the Select Committee (Parliament). The bill was envisaged somewhere in 2006, and lot of changes have happened in environment since then.

When we are bringing the 2014 bill, what the Irda opinion is, it is better that latest changes in technology, is also coming into the bill,” Vijayan said.

He was speaking to reporters on the sidelines of a conference organised by industry body Assocham on ‘Digitisation and Enhanced FDI in Insurance: The Road Ahead’.

The insurance bill , brought afresh by the NDA government in the recent session of Parliament could not be passed and was referred to the Select committee.

Replying to a query, Vijayan said some of the major suggestions are related to areas like health insurance, repositories and e-commerce.

“Some of the suggestions are in relation to life, non-life and health, which was not there in the one proposed in 2006. Health companies have started working and now we have experience in the health sphere, e-commerce has come. Some of the things have to find place in the bill itself,” he said.

The Irda is in favour of capital infusion in the insurance sector so that it can be strengthened, Vijayan said.

“What we have been consistently maintaining and is a fact also, is that industry needs capital. If foreign capital is increased, it will be easier flow of capital. We are not saying FDI has to come,” he said.

Asked about the level of capital inflows that would be required in the insurance sector, Vijayan said there were various estimates ranging from Rs 50,000 crore and upwards.

Asked about a universal policy to cover low-income groups which the Irda had favoured earlier, Vijayan said such a policy is being offered by companies under different names though the features are essentially the same.

“We have approved Customer Service Centre to sell policies, standardised policy. Some (insurance) companies have already started selling, standard and basic policy through CSEs. Features of the policy will be same. Each company will be marketing in their own name,” he said.

On digitalisation, Vijayan said, it is currently being done on a pilot basis and the matter would be reviewed once it is over.

“We have licensed five repositories and have asked all the companies to digitise a minimum of 5,000 policies and see whether there is a process problems.

“The pilot basis is expected to be over by end of this month. Once the pilot is over, we will review it, (and see) whether there are any project problems and try to solve it,” he said.

The digitalisation began with life insurance and it will extend to general insurance gradually, he said.

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