Insurance Regulatory Development Authority (IRDA) chairman J Hari Narayan on Friday said that the Life Insurance Corporation of India (LIC) should be treated at par with other insurers in terms of limit to invest in other firms.
“Our interpretation was that LIC should be treated at par with all other private insurers. But the government was of the view that there were certain provisions, only applicable to LIC (as per LIC Act). So, it’s a question of legal position,” Hari Narayan said, adding, “I think, it is imprudent.”
He was addressing reporters on the sidelines of an Insurance Brokers Association of India event.The government has allowed LIC to invest up to 30% in a company against the existing norm of 10% as stipulated in the Insurance Act, 1999 after the law ministry clarified that LIC Act, 1959 supersedes the Insurance Act, 1999. The government is likely to notify the new rules soon.
Referring to the autonomy of regulators, IRDA chief said the regulator has enough autonomy and the present issue of difference in approach to LIC case was a matter of legal position.
He said the board of the Insurance Advisory Council would meet shortly to discuss the new product design guidelines. “The product design guidelines have been examined by the council. They now have to be approved by the board and they are meeting on January 9,” Narayan said without divulging any details regarding the proposed guidelines.
He also said management expenses of the insurance industry in the country were one of the highest in the world and needed a relook.