The Hindu : `Bill on insurance brokers to come up in Parliament soon'

Online edition of India's National Newspaper
Friday, Apr 12, 2002

Southern States

Southern States - Andhra Pradesh-Hyderabad

`Bill on insurance brokers to come up in Parliament soon'

By Our Special Correspondent

HYDERABAD April 11. A bill amending the Insurance Act to provide for the operation of insurance brokers is likely to come up before Parliament in the next three to four months, the Insurance Regulatory and Development Authority (IRDA) chairman, N.Rangachary, indicated on Thursday.

Delivering the keynote address at a seminar on "The emerging horizon in Indian insurance industry'' organised by the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI), he said the IRDA was in the process of issuing a set of regulations to protect the interests of policyholders in the wake of the entry of the private sector in the insurnace business.

Mr.Rangachary assured that the private and public operators in the insurance business would be subject to strict regulations and regimen as laid down under the IRDA Act. There would be no compromise on the regulations governing the solvency norms of the insurance companies.

The IRDA chairman said a vibrant system of insurance intermediaries and agents would be promoted. Suitable capital adequacy norms had also been evolved. The ceiling of foreign equity at 26 per cent had not acted as a deterrent to the flow of foreign capital into the insurance sector and most countries across the world barring China had evinced interest in floating joint ventures, he disclosed.

The Governor, C. Rangarajan, who naugurated the seminar, said a major area that was opening up for insurance companies was the pension schemes. With the increase in the longevity of life, more and more people would need adequate protection during their non-working life.

The insurance industry can play a big role in this area if they evolved appropriate schemes providing pension or annuity.

The Governor said the rate of annual average growth in the life insurance industry during 1990-99 was estimated to be around 20 per cent and the growth in non-life insurance industry during the same period around 12 per cent.

He said new insurance products would not be confined to the traditional areas and new products would be required in the areas of trade and finance.

FAPCCI president, S. Thirumalai, in his welcome address, said out of the Indian population of one billion, the potential for insurance sector was estimated at about 270 million of which the coverage till now was only about 40 million people, which works about to 15 per cent of the potential.

K. Jayaprakash Ram, Chairman, Banking, Insurnace and Finance Committee, said 17 private insurance companies were operating both life and non-life insurance besides the LIC and the four general insurance companies in the public sector. FAPCCI senior vice president Omprakash Tibrewala proposed a vote of thanks.

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