Rao retires as insurance regulatory body chiefMay 14th, 2008 - 4:02 pm ICT by admin
Chennai, May 14 (IANS) “A fair and firm regulator” is the how insurance industry officials describe Chellapilla Satyanarayana Rao, chairman, Insurance Regulatory and Development Authority (IRDA) who lay down office Wednesday. Officials of the life insurance industry cite Rao’s firm decision to ban the actuarial funded products while giving time for companies to mend their ways and join the main stream.
The other instance relates to the issue of Life Insurance Corporation of India (LIC) not being able to meet the higher solvency norm stipulated by IRDA through an administrative order.
The regulator gave breathing time for the government-owned LIC to meet the norms without fanning the issue further.
“He was discreet in handling tricky issues and was not intent on sensationalising them. His contribution towards stabilization of the industry and growth is very good,” S.V. Mony, secretary general, Life Insurance Council told IANS.
Apart from banning actuarial funded products, his tenure saw issue of guidelines for unit linked insurance products that stipulated better disclosures and the minimum life insurance coverage norms.
Terming Rao as “the right person at right place at right time”, K.N. Bhandari, secretary general, General Insurance Council said: “The regulator faced more challenges in governing the non-life sector.”
It was Rao who ushered in the free pricing regime in the non-life sector and deregulated the tariff forms and conditions.
In order to pacify the strong transport lobby that was against the premium hike while balancing the interests of the non-life insurers, he brought in the Motor Pool to take care of the third party claims.
Bhandari said: “Rao’s tenure also saw the revisiting of all the insurance laws.”
While crediting the retiring regulator for the steps he had taken during his five year reign, industry officials also point out that he missed the bus in several areas.
According to them, deregulation of the insurance intermediaries, arguing effectively with the government against the imposition of service tax on insurance policies, solving the capital issues for the life insurers and their very high expense ratios among others remain unresolved.
The regulator was not able to take on the mutual fund industry’s campaign against the unit linked products of life insurers, they said.
Industry officials say the biggest failure of the two insurance regulators - Rao and his predecessor N. Rangachary - is that they were not able to have a proper organisational structure for IRDA itself.
They hope the new regulator is able to focus on the organisational set-up and strengthen it with more permanent officials than depending on officials on deputation.
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