India? S Regulator Requires insurers to disclose more financ

 

Tuesday, Mar 24,2009, 9:57:02 PM   Click:

Rebecca Ng
MUMBAI, India, March 24, 2009 (AM Best via COMTEX) --

The Life Insurance Council of India said that the national insurance regulator is asking insurance companies to disclose more financial data, including the margin of solvency, claims records and loss ratios on a quarterly basis for greater transparency and to enable policyholders to make more informed decisions.

Changes in disclosure regulations, as well as background on the handling of customer complaints proposed by the Insurance Regulatory and Development Authority (IRDA) will be effective from June 2009, the board said.

Under the new policy, the claims to be part of the disclosure of data. The IRDA has said that these figures give an idea? The number of claims settled and the number pending against the insurer? while others give an idea of the insurer? s underwriting capacity.

For the insured, the regulator said the new policy can help? Knowing the strength of the society they serve.

Under the policy, both life and general insurers to disclose audited annual issues of the IRDA, which will then publish the data in its annual report. In addition, insurance companies will need to disclose new revenue on a monthly basis, which will help the regulator to improve standards of corporate governance.

The IRDA has reported that in fiscal year 2007-2008, the sector of the Indian reported growth of 23.3% to 9.3 trillion Indian rupees (U.S. $ 184.82 billion). Nonlife sector grew by 14% in premium income to 2.98 trillion rupees.

At present, the regulation requires that the Indian national insurance insurers to maintain a solvency margin of at least 1.5 (1).

? Life insurance companies, which are in a long-term, have maintained a ratio of capital adequacy of 2 (1) to 5 (1), while insurers have maintained their margin of solvency 1.5 to 1.7.

The council added that India, the insurance companies? Have always been well capitalized? and the domestic insurance sector has "faced no risk? since insurers investment in derivatives or credit default swaps is largely not allowed? by IRDA.

Given the new policy, one of the largest life joint ventures in India, ICICI Prudential Life [89580] said in a statement that the information is? Good for the industry? since the current policy only requires insurers to disclose their income and the premium should not give "an overview of the company.

Nonlife national joint venture Tata AIG General Insurance [90168] said the disclosure of the customer complaint Redressal numbers? Force companies to better manage the problem.

In addition to the new guidelines for insurers? disclosure of data, life insurance said that the IRDA board also plans to declare the new guidelines for mergers and acquisitions in the insurance sector at the end of March.