By Venkatachari Jagannathan

Chennai, May 12 (IANS): The insurance regulations in India are set for a major overhaul with the two industry bodies likely to hire a consultancy firm to recommend regulatory changes, said senior industry officials.

The two industry bodies are - Life Insurance Council and General Insurance Council.

Industry officials told IANS preferring anonymity that the new Chairman of the Insurance Regulatory and Development Authority of India (IRDAI) Debasish Panda at his meeting with the sectoral officials had said the two Councils should turn vibrant.

It is learnt Panda had told them that the Insurance Information Bureau (IIB) should ideally be part of the Councils as it collects the data from the industry to come out with research reports.

Similarly, the Institute of Insurance and Risk Management (IIRM) should also be part of the industry and not that of the regulator.

A media statement from IRDAI had said: "It was proposed to revamp the role and functioning of the Life Insurance and General Insurance Councils, to make them more vibrant bodies. Role of Insurance Information Bureau of India (IIB) in supporting data and tech-driven insurance solutions was also discussed."

"To take these ideas forward and also come out with recommendations for overhaul of the regulations, the two Councils may have to hire a consultancy firm," officials told IANS.

The consultancy fee would be shared by both the Councils.

"How the fee would be shared by the members of the Councils-insurers- has to be seen. Whether it would be shared in the ratio of their gross premium or equally will have to be decided," a senior industry official told IANS.

Already several groups have been formed in the life/non-life/reinsurance to study the existing regulations and come out with recommendations on them.

IRDAI Chairman Panda had told the insurers that every Indian should have a life insurance policy; every family a health insurance family and every bread winner should have an accident insurance policy.

At its meeting with the industry officials, IRDAI said it had displayed firm commitment to carry out reforms which will lead to the objective of "Insurance for all" by 2047.

"These reforms, among others, include promoting ease of doing business by encouraging new insurance players, allowing niche players in insurance, relaxing renewal norms for intermediaries," product certification by insurers, time-bound approvals, administrative flexibility, fast-track approvals for investment proposals, facilitating InsurTech and distribution agility," IRDAI had said.

The IRDAI also has plans to make the regulations lighter and reduce the compliance burden on the insurers.

"Additionally, the need for risk based capital and solvency, convergence to Ind-AS, rationalising expenses of management, developing talent pool, updating investment norms and sustainable growth of industry were also deliberated," IRDAI said after its meeting with industry officials.

The two councils may soon come out with a request for proposal for interested consultancy firms to bid for the project.