The Insurance Regulatory and Development Authority of India (IRDAI) might consider adopting a risk-based supervision model for the insurance sector, according to Keki Mistry, Chairman of HDFC Life.
The change would see the implementation of new principles for managing operational, market, and governance risks, similar to those used in the banking sector.
Mistry made the remarks during HDFC Life’s 24th annual general meeting, which was reported by the Business Standard.
Mistry also highlighted several recent initiatives by IRDAI aimed at enhancing the operational and commercial flexibility of the insurance industry. These include new management expense regulations, increased sub-debt limits, and the introduction of the Bima Trinity – Bima Vistaar, Bima Vahak, and Bima Sugam.
He also noted other measures by the regulator, such as the establishment of state-level insurance committees, increased payouts for early policy surrenders, and relaxed rules for opening new branches by insurance companies. “These regulations would increase ease of doing business, encourage development of longer-term products, and improve persistence, thereby creating value for customers,” Mistry said.
Mistry also emphasised the need for insurance companies to expand into Tier 2 and Tier 3 cities to drive growth, given the country’s low insurance penetration.
