The Insurance Regulatory and Development Authority (Irda) is expecting to put in place the draft guidelines for mergers and acquisitions for the insurance sector and the level of disclosure by insurance firms by March 2010. The regulator is also setting up a data warehouse for the management of health insurance claims.
Speaking to reporters after launching the Star Health Magazine — published by Chennai-based Star Health and Allied Insurance Company — here, Irda chairman J Hari Narayan said the draft guidelines will not only give a boost to the insurance sector, but will also help them operate with more clarity, since there are no guidelines in place now.
“Irda is evolving rules and regulations to put in fairer corporate governance practices in the insurance sector. Since none of the insurance companies are listed with the stock exchanges, the possibilities of corporate risks could arise. To ensure that such a thing doesn’t happen, the regulator might unfold fairer corporate governance guidelines for insurance in the future with many more new laws in place,” he added.
Hari Narayan said Irda was talking to the market regulator, Securities and Exchange Board of India, about the role of the new internal committee. The committee would come out with new directions for the insurers and would focus on improving the level of disclosure by the insurers, including cash flows.
Irda has set up a data warehouse in Hyderabad to monitor the settlement of health insurance claims. The regulator has already uploaded insurance claim records of insurers for the past five years and “it has been successful,” he said.
The database, which can be accessed by companies in the next few months, will help the insurers to analyse the disease or the geographical location on the basis of which they can design the product. For instance, the product would cost more in Mumbai than in Chennai or Hyderabad. These measures would help insurance companies to manage the claim process, which is the need of the hour.
He said the premium collected for health products is around Rs 6,000 crore, whereas claim settlement is around Rs 7,000 crore.
