LIFE INSURANCE COUNCIL LIKELY TO GET AUTONOMY

The insurance industry regulator IRDA has promised self regulatory powers for the Life Insurance Council - an industry association of life companies. As a first step, the council will be asked to tackle the issue of rebates by insurance agents and that of improving the quality of agent training and agent examination.

"Regulation always inhibits innovation. To reconcile these two, the best answer is self regulation. Insurers will have to see that innovative products are transparent and policyholder, I kept fully briefed about the policy". Said C.S. Rao, Chairman IRDA, speaking at the inauguration of the Life Insurance Council office in Mumbai.

Mr. Rao said that following liberalization there has been a proliferation of life insurance products leading to confusion among buyers. "The council can play a major role in insuring that various ingredients of policies are brought out".

Among the issues that the Life Insurance Council would address would be prohibition of rebates of commission and also training agents. "At present the IRDA identifies the agency for training and carrying out examinations". Said Mr. Rao. He added that it was not possible to control all these agencies across the country. CEO's through their HR managers can send the right message. In future the council would also insure that the insurance companies stick to their management expenses ratio.

Speaking at the function, Mr. S V Mony general secretary of Life Insurance Council said that there is a provision for setting up the insurance association of India under the Insurance Act, 1938. Section 64C of the Act provides for two councils of the Insurance Association of India for life & non-life industry. He said that the council will set up the mortality and morbidity information bureau and take an active role in its functioning. He said that the council would also take up the work relating to training, examination and certification of agents as provided in the Insurance Act. On Friday, Mr. Rao inaugurated the Council's office in Santa Cruz and also launched a Council's website which will provide structured regular information to the public about the industry. Although it is an industry body, the council will be chaired by Mr. T. K. Banerjee, member IRDA.