Insurance industry in India is on a warpath to boost growth and cut losses. They are knocking on the doors of the Finance Ministry to bring in reforms which will fuel growth in the slacked insurance sector. And the FM seems to be backing them up too.
Over the last few days, the top bosses of leading insurance companies have caught up with Finance Minister P Chidambaram and discussed serious issues harming their growth and profitability. They have also expressed their concern over the regulations which involve participation of the three regulators IRDA (Insurance Regulation Development Authority), RBI (Reserve Bank of India) and SEBI (Securities Exchange Board of India).
Several guidelines around pension products, Bancassurance, revised process of policy application, etc which directly impact the growth of sector require a fair consent from the insurance companies before taking effect. One of the CEO’s from a leading life insurance company commented, “Our long-term strategy and planning gets impacted due to frequent change in policy framework. Moreover, the time for transition to new processes is not enough and we end up disrupting the internal communication”
Few of the regulatory changes in the past have been executed in a hurried manner which has disturbed business in many insurance companies. Life insurance companies had to discontinue sales of a particular product without having a second option ready to offer in place to the customers. Also the time taken to seek an approval from the IRDA on new policies varies from 45 days to 140 days which creates a paucity of plans at the company’s end.
The meeting with the Finance Minister is in continuation to the discussion with the Prime Minister few months ago where it was discussed that the issues will be jointly discussed and dealt with.
