After reining in unit-linked insurance plans (Ulips) with new guidelines, the Insurance Regulatory and Development Authority (Irda) has decided to revamp reinsurance rules.
"Reinsurance is now the priority for Irda," said Chairman J Hari Narayan, adding a committee had already been formed to look into the various issues relating to reinsurance.
"Various aspects of reinsurance have to be strengthened and improved, and that is what we will be working towards a rehaul of reinsurance," he said.
Rinsurance is a tool to reduce losses due to claims. It allows companies to accept greater risk than they normally would, as some of their risk is shared by the reinsurers.
The insurance regulator last week released a draft on electronic transaction and settlement system regulations. It proposed computerisation of administration and settlement of accounts in respect of all inter-company transactions, both coinsurance and reinsurance.
The draft regulation provided for setting up of a service company for creating an electronic transaction administration and settlement system between reinsurers, insurers and brokers so that these transactions could be tracked by Irda to bring more efficiency and accuracy.
Hari Narayan, who delivered the convocation address of Institute of Insurance and Risk Management, set up by Irda and the Andhra Pradesh government, said the draft initial public offer guidelines for insurance companies had been sent to the market regulator, the Securities and Exchange Board of India (Sebi). "We are confident of hearing from Sebi in this regard soon," he said.
"Redesigning and revamping various insurance products and processes will be a continuous affair," Hari Narayan said when asked whether Irda would review the Ulip guidelines after feedback from the insurance companies. The new guidelines have been issued with effect from September 1. So far, Irda had cleared 65 Ulips and more had come for approval, he said.