In a meeting with finance minister P Chidambaram on Tuesday, insurers are expected to take up their grouse against the Insurance Regulatory and Development Authority (IRDA), and demand an Appellate Tribunal for the sector.
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The meeting, which will see chiefs of all insurance companies and Irda chairman J Hari Narayan under one roof, is expected to mull over ways to remove bottlenecks and put the industry back on the growth path.
“Unlike the Securities and Exchange Board of India (Sebi), which has an Appellate Tribunal there is no Appellate Tribunal at the Irda. If that is formed, some of the decisions they are taking will go against them and that is one of the points that we are going to raise against them tomorrow,†said the CEO of a leading insurance company.
According to industry players, the finance minister has asked for three things – issues in the industry, issues with the regulator and those regarding tax – on which the industry will table its case.
In a separate meeting, which will not be attended by Irda chairman, insurers are expected to highlight some sore points they have been facing over the last two years with the regulator.
There is also an undercurrent of distrust between the regulator and the industry.
“In the current environment there is nothing that we can plan. We don’t know when new guidelines will get implemented. If they get implemented, what will be the transition time. And if we file a product, how much time will it take for approval,†said the head of a private sector insurance company on condition of anonymity. “While macroeconomic factors have their impact, a lot of the issues are related to the regulator.â€
As reported by The Indian Express in September, 2011, Irda took an average 344 days to process a health insurance product, 135 days for a general insurance one and 105 days for a life insurance product.
Industry players say that the approval time is higher. “When they say 105 days they include the rejected products and that brings the number of days down. If only the approved products are taken, the number is higher,†said the CEO.
The regulator, however, argues that the delay is on account of the way the products are filed by the insurers.
The meeting comes after the finance ministry’s few rounds of discussions with mutual fund players following which the Sebi announced a series of steps on August 16 to provide a fillip to the sector and primary markets. It also comes at a time when the industry is faltering on falling new premium collections, missing pension products for almost two years and the regulator taking a lot of time to approve products.
Undercurrent of distrust
* The meeting, which will see chiefs of all insurance companies and Irda chairman J Hari Narayan under one roof, is expected to mull over ways to remove bottlenecks and put the industry back on the growth path
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* The insurance industry wants an Appellate Tribunal at the Irda
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* Industry players also say that the approval time taken by Irda for a product is higher, the regulator, argues that the delay is on account of the way the products are filed
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* The meeting comes at a time when the industry is faltering on falling new premium collections
