The government notified six insurance regulations of IRDAI

Effectively, insurers can implement these six rules immediately after they are notified by the government.

The government has notified six important decisions of the insurance regulator IRDAI, which were taken by its board on November 25.

Effectively, insurers can implement these six rules immediately after they are notified by the government.

The speed of information shows the priority of the government on the issue of penetration in the insurance sector. It is expected that the government will deal with the proposed amendments to the two insurance Acts-the Insurance Act, 1938 and the IRDA Act, 1999 for the metamorphosis of the insurance sector, which were put up for public comments earlier this week. said the experts.

Normally, it takes a few months for IRDAI to notify the board of any decision.

The following decisions have been made in the rules by the government on Thursday.

Increase in tie-up limit for intermediaries: The maximum number of tie-ups for corporate agents, in order to provide policyholders/prospects wider choice and access to insurance through different distribution channels and to facilitate last mile reach of insurance (CA) and Insurance Marketing Firms (IMF) have been increased. Now, a CA can tie up with 9 insurers (earlier 3 insurers) and IMF can tie up with 6 insurers (earlier 2 insurers) in the business each of life, general and health for distribution of its insurance products. The area of operation of IMFs has also been expanded to cover the entire state in which they are registered.

Regulatory Sandbox: Regulatory Sandbox is a framework that provides a testing environment to enable companies to test their innovative products, technologies etc. in a controlled regulatory setting. It promotes innovation and technological solutions in the industry.

Certain amendments were also made to the regulatory sandbox regulations to allow insurers/intermediaries to extend the experiment period from ‘6 months’ to ’36 months and change from the existing batch-wise (cohort) experiment on a continuous basis. Approach) Sanction/Approval for approval/approval on an ongoing basis.

The provision for review of rejected applications under sandbox has also been introduced as a part of the amendments.

Other forms of capital: To facilitate ease of raising other forms of capital such as subordinated debt and/or preference shares, the requirement of prior approval from IRDAI has been dispensed with. The amendments have also raised the limit for raising such capital (the threshold limit has been increased from 25% of the paid-up capital and premium to 50%, subject to 50% of the company’s net worth). This will enable companies to raise the required capital on time. Amendments have been introduced to provide oversight of the board in raising such capital.

Appointed Actuary: Appointed Actuaries (AA) play a vital role in the operations of an insurer. To ensure an adequate supply of actuarial professionals in the industry, experience and qualification requirements have been made flexible.

Maintenance of solvency by insurers is an important aspect of the health of the insurer and AA plays an important role in maintaining the solvency level.

The responsibility of the AA has been enhanced by introducing provisions for identification, monitoring, reporting and recommending action for risks affecting the solvency position of the company. Obligations have also been placed on insurers to ensure that AAs can properly discharge their responsibilities.

Solvency Criteria: With a view to enabling insurers to efficiently utilize their capital and resources and to increase insurance penetration in crop insurance, the period for considering outstanding premiums to the State/Central Government for computation of solvency position has been increased from 180 days to 365 days has given. ,

Solvency factors related to crop insurance have also been reduced from 0.70 to 0.50, which will bring down the capital requirements for insurers to around Rs. 1460 crores.

Registration of insurance companies: The amendments to the regulations relating to the registration of Indian insurance companies are aimed at promoting ease of doing business and simplifying the process of setting up an insurance company in India.

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