The Indian insurance sector is lacking adequate specialised skilled professionals in areas like actuarial science and treasury management, the Rakesh Mohan Committee on Financial Sector Assessment said.
"The Indian insurance industry faces an inadequate supply of specialised skilled professionals, particularly in the areas of treasury management and actuarial and underwriting skills in non-traditional areas," the committee said in its recent report.
It further said that adequate initiatives need to be taken in this regard and insurance regulator Insurance Regulatory and Development Authority (IRDA) too needs to continue taking steps to enhance skill sets as well as retain its skilled staff.
"IRDA should put in place systems to ensure effective group-wide supervision by formalizing the relationship through an MoU with both home and foreign regulators," it said.
The committee also said that there is a need for an increase in the supervisory powers vested with IRDA as regards the constitution of a consultative committee, the enforcement of criminal penalties and winding up of an insurance company.
"IRDA needs to address issues related to the policy framework that needs to be put in place for risks associated with dealing in derivatives by insurance companies," it said.
The committee further said some of the provisions of the Insurance Act 1938 are outdated and need to be reviewed in the context of the changing economic environment.
The report highlighted that the key indicators of the life insurance segment show a reasonably comfortable position in solvency and capital adequacy.
It, however said, "There is no concerns as regards asset quality, profitability and liquidity."
On the non-life segment, the committee highlighted that the segment displays a comfortable solvency. However, earnings and profitability as well as liquidity are areas of some concern.
The Committee submitted its six-volume report, India’s Financial Sector – An Assessment, to Finance Minister Pranab Mukherjee on March 25, 2009.
