IRDAI sets up panel for standalone micro-insurer

The Insurance Regulatory and Development Authority (IRDAI) has formed a panel under Mirai Chatterjee, director, SEWA, Ahmedabad, to assess the desirability and feasibility of the formation of standalone micro-insurance companies in the country.

Well-known banker with exposure in micro-finance sector Nachiket Mor and Ajit Dayal, founder, Quantum Mutual Fund will be also the members of the panel with eight other experts and the panel would submit its report in three months. India is the largest micro-insurance market in the world. The panel would review the existing legal and regulatory framework to enable a standalone micro-insurance company, Indian Insurance Company, after analysing similar provisions in other jurisdictions. It will also recommend the maximum sum insured per person which may be accepted by the proposed micro-insurance company.

The panel will also consider the aspect of ease of doing business, suggest on the applicability and or relaxation of extant Act and regulatory provisions for the proposed micro-insurance company, which may be registered as an insurer. The indicative regulatory aspects are: capital and solvency, underwriting, product and claims, finance and accounting, investments, operations and corporate governance, India has been seen to be a pioneer in the micro-insurance sector in the world and has provided an example with its micro-insurance regulations. IRDAI has received suggestions on allowing standalone insurers for transaction of exclusive micro-insurance business, as it may boost the micro-insurance penetration in India with geographical spread, IRDAI said.

Another committee set up by the IRDAI in 2019 had proposed that option to pay a single premium in daily, fortnightly, monthly or quarterly instalments should be allowed. It also proposed stamp duty waiver for microinsurance plans, especially for life insurance policies and E-KYC should be mandated. The committee recommended for introducing long term policies for a period up to 5 years.

Further, in a bid to develop a single products combining life, non-life and health features product, which are simple, affordable and easy to understand, IRDAI has set up another committee under Yegna Priya Bharat, CGM, IRDAI. The panel will recommend design of products on policy wordings, policy schedules and prospectus for such combi-products. It will also recommend the servicing aspects of such policies, where there is an involvement of more than one insurer.

Source: The Indian Express