meri saheli magazine

meri saheli magazine

meri saheli magazine Published this article page no  31 DEVELOPMENTS RELATED TO INSURANCE SECTOR About Insurance Regulatory Development Authority of India (IRDAI) IRDAI (HQ Hyderabad since 2001 earlier in Delhi) is an autonomous regulatory body established in 1999 through IRDAI Act of 1999 with primary aim of protecting the policyholders interests. It was established on the recommendations of the Malhotra Committee Report. It manages and regulates the insurance and reinsurance industry in India along with registering andor licensing insurance reinsurance companies and the intermediaries. IRDAI retains LIC GIC New India as Domestic Systemically Important Insurers (DSIIs) Life Insurance Corporation of India (LIC) General Insurance Corporation of India (GIC) and New India have been retained as DSIIs for 202122. o DSIIs are identified on an annual basis by Insurance Regulatory and Development Authority of India (IRDAI). DSIIs refer to insurers of such size market importance and domestic and global inter connectedness whose distress or failure would cause a significant dislocation in the domestic financial system. o Their continued functioning is thus critical for the uninterrupted availability of insurance services to the national economy. o They are perceived as insurers too big or too important to fail. DSIIs are subjected to additional regulatory measures to deal with the systemic risks and moral hazard issues. Parameters for identification of DSIIs o Size of operations in terms of total revenue including premium underwritten and value of assets under management. o Global activities across more than one jurisdiction. RBI and IRDAI nod must for FDI in bankled insurers The new Foreign Exchange Management (Second Amendment) Rules 2021 that amend the Foreign Exchange Management Rules 2019 have been notified. The Foreign Exchange Management Act 1999 provides legal framework for the administration of foreign exchange transactions in India. Key highlights Applications for foreign direct investment in an insurance company promoted by a private bank would be cleared by the RBI and IRDAI to ensure that the 74% limit of overseas investment is not breached. o Earlier this limit was 49% under the 2019 rules. Majority of directors and key management persons should be resident Indian citizens in a domestic insurance company having foreign investment. Additionally at least one of the three key management persons chairperson managing director or chief executive should also be resident Indian citizens. With insurance penetration of 3.76% in FY20 (life insurance at 2.82% and nonlife insurance at 0.94%) the amended rules can further help ino Bringing more FDI in Insurance Sector. o Increase competition with new products to enhance insurance penetration. Model insurance villages IRDAI has come out with concept of model insurance villages to cover entire population in village areas with financial support of various institutions like NABARD and CSR funds. o Idea is to offer comprehensive insurance protection to all the major insurable risks that villagers are exposed to and make available covers at subsidized cost. IRDAI suggested to implement it in a minimum of 500 villages in the first year and increase to 1000 villages in subsequent years. o It said efforts in selected villages need to be continued for a minimum of 3 to 5 years so as to make insurance benefits visible to the community meri saheli magazine buy.

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