Noida, India (PressExposure) October 14, 2009 -- IRDA, the insurance regulator is now getting serious about the fact that whether the banks will sell insurance from multiple companies or not and is looking at this issue very deeply. The news was confirmed by an official of IRDA.
The member of Insurance Regulator and Development Authority, R Kannan said that initially, regulator will allow banks to sell insurance from 2-3 companies and will see the result to take further decisions.
According to current norms, banks are not allowed to sell insurance from more than one company.
For past some time, IRDA is receiving requests from many general insurers to let banks get relief from this norm. Now, regulator has set a seven member committee to review the norms.
Kannan said that IRDA will soon be coming up with a new architecture. The main issue today is that how many insurance companies should be present with a bank. Regulator has to see that the new norms should be administratively possible, operationally feasible and is in favour of policy holders.
He also said that the regulator is also mulling the draft policy documents in regional languages. The new circular for this norm would come out within 3 months.
Regulator is keen on providing the customers with insurance options in their own regional languages.
Kannan added that IRDA is not going to force insurers to come up with vernacular in every language as this will result in increased cost.
A new committee is set by the regulator to look after the new tax code implications for the insurers.
According to Kannan, IRDA would soon be developing an early warning system for non-life insurance companies.
The early warning system means a consolidating risk rating given to insurers according to their expense ratio, loss ratio, claim ratios and yield on investments.
This system is helps the insurance companies to correct their expenses if there is some possibility of loss.
Kannan added that IRDA has already finished with early warning system for life insurance companies and would be developing the same for non-life insurers soon.