IRDA,pension regulator brace for face-off

PFRDA chairman Yogesh Agarwal told The Indian Express,“The pension plans of life insurers,too,must come under our regulatory purview.” He,however,did not show any urgency to raise the issue. Not that the insurance regulator IRDA is unaware of the ‘hybrid’ nature of such products. “The joint committee chaired by the finance minister may have to take call on this too,” said an Irda source who did not wish to be quoted.

As things stand now,IRDA does not want to let go of its regulatory oversight over pension products launched by insurers. “Since life insurance companies are under the purview of IRDA,all the products launched by them should also be under our regulatory ambit,” said a senior official at IRDA.

Pension is one of the most promising areas for life insurance companies. As on March 31,2009,life insurance companies had 31,61,000 active policies in the individual pension and annuity space. Of this,27,89,000 are contributed by LIC. “Globally,there are two models that work. One,the pension space is a part of the life insurance business and is managed by them and secondly,in some markets,there are standalone companies that do pension business. In India,since we are in a business of managing and creating wealth for the long-term,it is natural that pension should also be done by us,” said Rajesh Sud,chief executive officer,Max New York Life Insurance company.