: IRDAI in need of fresh blood transfusion, restructuring, say experts #IndiaNEWS #Business By Venkatachari JagannathanChennai, Oct 11 | Infusing fresh blood into the Insurance Regulatory and Development

IRDAI in need of fresh blood transfusion, restructuring, say experts #IndiaNEWS #Business
By Venkatachari JagannathanChennai, Oct 11 | Infusing fresh blood into the Insurance Regulatory and Development Authority of India (IRDAI) by offering voluntary retirement scheme (VRS) to older employees, appropriate staffing, and reviewing some of its guidelines or regulations are the need of the hour, said experts.
They also said unlike other industries where the cost of a product is known upfront, the cost in the case of an insurer will be known only at the end of two financial years.
Hence it is not possible to fix an overall limit expenses, instead of sub-limits, as demanded by some.
The IRDAI is over two-decades old. The organisation lacks officials who are in tune with the changing industry trends while developing vested interests. It is time to introduce a VRS for the IRDAI staff and bring in fresh blood, a retired Chairman-cum-Managing Director of a public sector general insurance company, speaking on the condition of anonymity, told IANS.
According to him, there is no accountability for officials in the IRDAI.
The expert also said that the IRDAI after failing in its primary job efficient governance of the industry ventured into the job of product designing and forcing the companies to sell the same.
IRDAIs first Chairman, N. Rangachary told IANS that it is time for an organisational review since the body is more than two decades old.
Several senior industry officials have voiced their views to IANS.
There should be a review committee to go into all regulatory aspects. It is time to see whether the original goal of forming the regulatory body has been fulfilled and if not, the action to be taken, Rangachary suggested.
Echoing similar views was R. Ramakrishnan, Member of the Malhotra Committee on Insurance Reforms.
It is high time the IRDAI is completely reviewed. This should have been done at the end of the first five years. Better late than never, Ramakrishan told IANS.
As to what is to be reviewed, experts said the entire organisation, its structure, and regulations governing the sector.
IRDAI is totally unprofessional and one cannot find such a regulator in any financial sector, several industry officials have told IANS preferring anonymity.
So much so a former senior IRDAI official told IANS that I am ashamed to say today that I was earlier with IRDAI.
The retired CMD of the PSU insurer said the IRDAI has favoured the private non-life insurers and one of the example is its Motor Insurance Service Provider (MISP) guideline allowing payment of higher commissions of vehicle dealers.
The expenses of an insurer are met out of the premium received. If nearly 40 per cent of the annual premium is paid to an intermediary, then there will not be anything left for payment of claims, he added.