Real effects of Insurance Act still to come, say life insurers

Companies say regulations by IRDAI would shape future fate

The real impact of the Insurance Laws (Amendment) Act will only be seen after corresponding regulations are brought out by the Insurance Regulatory and Development Authority of India (Irdai), life insurers said.

Speaking at an insurance conference organised by Fintelekt, life insurance executives said how the future of the industry shapes up would depend on what norms Irdai brings out.

Vibha Padalkar, executive director and chief financial officer of HDFC Life, noted the regulator has already brought out norms for rural and social sector obligations, stipulating stricter penalties for defaulting on these obligations.

However, clarity is required around ownership and control-related provisions, said Sandeep Ghosh, managing director and chief executive officer (MD & CEO) of Bharti AXA Life Insurance.

Insurers said unless Irdai clarifies its position, companies would adopt a 'wait-and-watch' approach towards listing on the exchanges or increasing foreign stake.

Tarun Chugh, managing director and CEO of PNB Metlife India Insurance, said: “There has been a significant improvement in product approvals from the regulator.” He added that the Pradhan Mantri Jeevan Jyoti Bima Yojana has also helped every household have access to life insurance.

Manoj Jain, CEO of Shriram Life Insurance, said this product by the government had increased awareness, especially since the product is easy and simple to understand and distribute.

Product innovation was one theme the life insurers debated about. K S Gopalakrishnan, MD & CEO of AEGON Religare Life Insurance, said as long as there is a need among customers, the opportunity for innovation exists.

However, Girish Kulkarni, MD and CEO of Star Union Dai-ichi Life, said: “Insurance is still being served at the top-end and to some extent, middle of the pyramid. At present, product innovation is limited to new features. We are yet to come closer to innovation.”