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Home / IRDA Update 

IRDA will need real-time info to be effective

The insurance regulator has expressed dissatisfaction with companies reporting solvency positions at the end of stated periods. “The regulator will try to get as close as possible to solvency positions on a current basis,” said chairman, IRDA, N Rangachary at a CII seminar on `IT For Insurance: The Technology Advantage` today. 

Information gathering in India is faulty and therefore suffers on account of acceptability and utility, Rangachary said. “The regulator will require far more information and real-time information from companies in order to be effective. 

Companies have not even closed their books for the fiscal year ended 31st March ’00. Even that information is as not yet available. A new mechanism for generating current and authentic information will be very important and I see IT as the biggest enabler of this process,” he said. 

B K Chaturvedi, special secretary, ministry of finance, said the first private insurance company would probably be able to begin operations by October this year as all the plans for the notification of laws was on time. He, however, felt that some further changes in the IRDA Act would be required to remove all grey areas that could later lead to litigation. 

Some areas that require clarification are the treatment of plastic cards, authentication of digital signatures and digital security issues. “Laws are not enough, they should be free from doubt, so as to leave no room for litigation,” he said.

He further said the whole objective of introducing IT to the insurance sector should be to ensure the best possible quality to the consumer. “I see IT in the insurance sector helping to stabilise and standardise products and also in adding on customised modules for the benefit of the consumer,” he said.

Outlining the benefits of IT, he said the customer would be centre-piece, not just king, but emperor, with access to the best quality of services. The regulator, too, could use IT as a powerful tool for implementing regulations. The cost of management would be reduced dramatically and this again would translate into cheaper policies and a “choice as never before for the consumer”, he said.

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