Insurance Development and Regulatory Authority (IRDA) had set up two committees which will work on level of disclosure by insurance companies and on new guidelines for mergers and acquisitions (M&A) in the insurance sector. Both the guidelines are expected to be in place by March next year.The regulator is also setting up a data warehouse for health claim management which would enable the insurers to improve the quality of products and manage claim arising out of health insurance. Speaking to reporters after launching Star Health Magazine, published by Chennai-based Star Health and Allied Insurance Company in Chennai on Sunday IRDA Chairman J Hari Narayan said that draft guidelines should be ready by March 2009. This will not only give boost to the insurance sector, but it will also help them to operate with more clarity, since there are no guidelines in place now.On corporate governance, he added, IRDA is evolving rules and regulations to put in fairer corporate governance practices in the insurance sector. Since none of insurance companies are listed with stock exchanges, possibilities of corporate risks could arise there and to ensure a halt in them, the regulator might unfold fairer corporate governance guidelines for insurance in future with many more new laws in place.
The new internal 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. The regulator is talking to the market regulator Securities and Exchange Board of India (SEBI) in this regard, said Narayan.Speaking about the data warehouse the chairman said, IRDA is had set up a data warehouse in Hyderabad to monitor claim settlement arising out of health insurance. IRDA had already uploaded insurance claim records of insurers for the past five years and "it has been successful". He added, insurance companies can access the data base in the next few months. This will help them (insurers) to do analyse on disease and even geographical location based on which they can design the product. For instance, Narayan said, product was costing more in Mumbai than cities like Chennai and Hyderabad.These measures would help insurance companies to manage claim process which is the need of hour. Narayan noted, premium collected for health products is around Rs 6,000 crore, whereas as claim settlement is around Rs 7,000 crore.
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