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| Disclosure norms will increase transparency: Insurers |
| Press Trust of India / New Delhi Oct 09, 2009, 18:37 IST |
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A day after Irda recommended that insurance firms should make public disclosures, insurers said the move would increase transparency in the sector and allow customers to take informed decisions.
"We welcome this announcement as it will further increase the transparency in the insurance sector and allow the customers to evaluate the risk profile and performance of a company to make informed decisions," Aviva India CEO and MD T R Ramachandran said.
He added that it would also provide the industry with an opportunity to receive feedback from analysts, investors and benefit from it.
Yesterday, Insurance regulator Irda came out with a draft on public disclosures to be made by companies.
The move comes ahead of several firms about to complete 10 years of their operations, after which they can go for listing.
The regulator has asked various stakeholders in the insurance space for their comments on the draft by October 25.
Commenting on the disclosure draft, Star Union Daiichi chief executive officer K Sahay said: "The disclosure norm is necessary and is in the interest of companies also. If the listing of insurance companies happens then it would help. This move by the regulator will increase transparency."
Once finalised, Irda is proposing to bring out the guidelines for public disclosure for insurance companies to be effective from November 1.
The insurers, both life and non-life, have to disclose their balance sheets, premium, commission expenses, operating expenses, on annual, half yearly, quarterly basis, according to the draft.
Besides, they also have to disclose their revenue, profit and loss account.
"It is essential that the investors are fully aware of the financial performance, company profile, financial position, risk exposure, corporate governance and the management of the insurance company well before the companies go for their IPO," Irda has said.
Irda has said the disclosure requirement has been kept at the minimum, keeping in view the costs involved in making such disclosures and balancing with the need for transparency in the insurance market.
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