Chennai: More than two decades have passed since the setting up of the Insurance Regulatory and Development Authority of India (IRDAI). It is time for a committee to review it, said its first Chairman N. Rangachary.
Echoing his views were several industry experts who were past members of IRDAI and the head honchos of life and non-life insurance majors.
Insurance industry officials concur with this view given IRDAI’s human resources issues and the problems faced by the regulated entities for the past several years.
“It is time to do a review of IRDAI. It is more than two decades since IRDAI came into existence. As a matter of fact, every regulatory organisation should be reviewed at regular intervals,” Rangachary told IANS.
It was Rangachary who had paved the regulatory path for the sector as the first head of IRDAI.
“There should be a review committee to go into all regulatory aspects. It is time to see whether the original goal of forming the regulatory body has been fulfilled. If not, the action to be taken,” Rangachary suggested.
Echoing similar views was R. Ramakrishnan, Member of the Malhotra Committee on Insurance Reforms.
“It is high time the IRDAI is completely reviewed. This should have been done at the end of the first five years. Better late than never,” Ramakrishan told IANS.
Nonetheless, Queried as to what is to be reviewed, experts said the entire organisationis to be reviewed
“The review should be on IRDAI’s human resource policies and the regulatory aspects. It should include the procedures and the organisational set up. The IRDAI should be made transparent,” S.B. Mathur, former Chairman, Life Insurance Corporation of India, told IANS.
Mathur was also a part-time Member of IRDAI between 2007-2012.
During the initial years, IRDAI was on virgin territory and there was a lot of experimentation, trial and error. Over the years IRDAI has done reasonably well, Mathur said.
“The IRDAI Chairman would hold a monthly meeting with the CEOs of insurance companies during the first four years of its existence,” Mathur said.
“On the twin aim of IRDAI Act ‘to protect policyholders interests and promote orderly growth of the industry’ IRDAI seems to have done a reasonably good job in the 20 years of its existence,” K.K. Srinivasan, former Member, IRDAI, told IANS.
According to him, a Government review of IRDAI be taken up after reviewing the older financial services regulators like the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).
“But the internal organisation needs to be professionalised and strengthened. There is an undeniable perception that compared to its rather small size, there is excessive trade unionism within the Body,” Srinivasan said.
“This is perhaps attributable to a large extent to the inevitable and somewhat not desirable back-door recruitment of employees in the initial years of its formation. However, this may get corrected in due course when retirements take place,” he added.
Be that as it may, industry experts said presently the decision making power is centralised with the IRDAI Chairman while the Members seem to have only a recommendatory role.
“The IRDAI should be made a multi-member body with powers given to its Members. Times are changing fast along with technology. The regulations should also change in tune with them,” K.N. Bhandari, former Chairman and Managing Director of United India Insurance Company Ltd, told IANS.