IRA seeks sweeping powers

Speaking at a seminar on insurance here, organised by the Bengal Chamber of Commerce and Industry, Rangachary said IRA should be empowered to issue guidelines in respect ofinvestments and solvency margins of the insurance companies.

IRA, which is the only autonomous regulator in the history of insurance industry in the world, would also seek powers for granting registrations to new insurance companies. Further, if the regulator was convinced that a particular company was not in a position to honour underwriting commitments, then it would also have the power to depute a chief executive or chief underwriter, he said.

He said the regulator should also be empowered to seek periodical statements about the state of affairs from insurance companies, a practice being carried out in the developed countries.

According to him, this would help the regulator to inspect the functioning of insurance companies. B K Chaturvedi, special secretary in-charge of insurance in the Ministry of Finance, said once the insurance sector was thrown open to private and foreign participation, the problem of financing infrastructure would be largely solved. He said at present, both the LIC and GIC parkaround $ 7 billion as investible funds on an annual basis. However, with the opening up of the sector, the quantum of investible funds would go up to around $ 30 billion.

Stating that the Indian insurance industry had all the evils of a public sector monopoly, Chaturvedi added the recent appointment of an ombudsman would help customers in redressing grievances. He said India would emerge as a major market for re-insurance and efforts should made to develop this market.

The chairman of General Insurance Corporation, D Sengupta, said non-life insurance business would have to gear itself to face emerging competition.