Recently, as the Finance Ministry warns the PSUs for huge underwriting losses and their dependence on investment income for profits, a report co-authored by a former Member of the Insurance Regulatory and Development Authority of India (IRDAI) mentions that the regulatory framework and support system which tend to “over-regulate”, high cost of compliance and less “development oriented” policies are the real reason for the segment’s woes. “The regulatory anchors relating to products, pricing, placement and promotion, outsourcing and many more under the banner of protecting policy holders interest, do not meet modern and global standards,” said the report authored by H Ansari, former member, IRDAI, and Arun Agarwal, former Lloyd’s India representative.
“The regulatory framework and support system tends to over-regulate (plethora of regulations with caveats, exception and quotas). Predictably, the cost of compliance is high and regulatory policy is less ‘development oriented’. The essential elements of ‘ease of doing business’ framework has not been incubated within the policy and regulatory framework to establish a credible, proportionate and supportive regulatory regime,” said the report which was submitted to the finance ministry, Niti Aayog and IRDAI.
