 "Nilesh Sathe")
Pension products offered by insureres can be managed by Insurance Regulatory and Development Authority of India (IRDAI), said Nilesh Sathe, whole-time member (life), IRDAI. Speaking on the sidelines of a CII Financial Distribution Summit, he said that in all countries, the risk of living short and living long comes under insurance.
Pension Fund Regulatory and Development Authority (PFRDA) has been engaged in a dialogue with the finance ministry to regulate all pension products including those floated by mutual fund and insurance companies. Since the Act gives them powers to regulate all pension products, PFRDA has sought approval to regulate all such products.
Meanwhile, IRDAI has also taken up the issue of taxation in insurance with the government. Sathe said that Gross Domestic Savings has got some component of the financial sector, but only insurance is being taxed.
Also, there is a relationship between premium and sum assured, otherwise maturity proceeds are taxed at a TDS of 2 per cent. Without PAN number, there is a taxation of 20 per cent.
"Insurance sector has been instrumental in providing good support to government's developmental activities. About 50 per cent and above amount goes to government securities from insurance sector. If it is supplementing government, shouldn't it be promoted," he questioned.
On the issue of listing of insurance companies, he said that they go public as quickly as possible because there should be involvement of retail investors into it. "When the retail investors through equity market will subscribe to the share capital of insurance companies, there will be bigger pressure on them in all forms, including products they are running, on expenses of management and there will be people who will question, now it is only internal management," he explained.
With respect to new guidelines by the regulator, Sathe said that they will have a re-look on outsourcing guidelines, though they will specify some activitiirs and processes, that should be done only by insurers themselves.
