Two recent Irdai orders show why the regulator needs to be given more teeth

Between January 7 and 8 Irdai rapped an insurance firm and a broker for violating norms - one for parking money with related firms, and another for out-and-out reinsurance fraud

The insurance regulator has rapped an insurance firm and two major brokers in the past week for mis-selling car insurance, parking money with related companies violating corporate governance norms and finally for an out-and-out fraud in reinsurance. Despite the serious breaches of corporate governance, the orders issued between January 7 and 8 by the Insurance Regulatory and Development Authority of India (irdai) point to an urgent need to equip the regulator with more teeth. In all cases Irdai has only imposed a fine of Rs one to three crore each and stopping incentive payment to one CXO level officer. 

To come