Irdai to create state insurance plan mirroring SLBCs: Debasish Panda

Aim is to bring down regulations and promote innovation in the sector

The Insurance Regulatory and Development Authority of India (Irdai) is trying to create a state insurance plan in which district potential targets will be aggregated to create plans similar to the State Level Bankers’ Committee (SLBC), Irdai Chairman Debasish Panda said on Thursday.

“Depending upon the potential and the protection gap (in states), we are trying to create a state insurance plan with equal partnership of state governments in this effort, helping us in our objective of achieving insurance for all by 2047,” he added at a Confederation of Indian Industry event in New Delhi.

The SLBC is the highest body of bankers at the state level, ensuring coordination between the government and banks on matters pertaining to banking development. It meets once every quarter to discuss the effective implementation of development programmes and government guidelines in areas of poverty alleviation, with special emphasis on priority sector lending, financial inclusion, etc.

Panda said Irdai is also looking to bring down the number of regulations for insurance players and promote innovation in the sector to ensure the availability, accessibility, and affordability of insurance products.

“We have a huge number of regulations and about 1,000-odd circulars, which are undesirable. As of now, 97 circulars have been repealed, and more than 79 returns have been rationalised,” he added.

Panda said the regulator is making efforts towards building a reinsurance landscape that will enable India to become a global reinsurance hub.

“We have the GIFT International Finance Services Centre in Gandhinagar, on which this global reinsurance can be created,” he added.

“We are also working with the councils of both life and general insurance to have a Unified Payments Interface-like moment for the insurance sector. A conceptual framework has been contemplated,” he said, adding this is being proposed through the Bima trinity — Bima Sugam, Bima Vistar, and the women-centric Bima Vahak.

He pointed out that the government is considering an amendment to the Insurance Act that will enable the entry of new players in the form of micro, regional, captive, specialised, and even composite licences.

“We have also recommended that currently the intermediaries or distributors are required to come and renew their licence of registration every two years. So we have requested that a one-time registration or a perpetual licence be provided,” he said.

Speaking on surety bonds, he said that the insurance regulator has tried to address some of the ‘pain points’ in relation to surety bonds, and stressed that it may make further changes if needed.

“One of them (pain points) we have recently removed is that there was an additional layer of solvency requirements, which we have removed now. So from our side, I think we have done whatever we thought was appropriate. But I am absolutely open to any more suggestions, which will help this market grow and also help our infrastructure grow in this country,” he added.