Five months after the insurance Regulations Review Committee (RRC) was set up, the sub-group to look at the regulations for the intermediaries have not met even once.
The reason? A senior official of the Insurance Regulatory and Development Authority of India (IRDAI) has raised some fundamental questions on the constitution of the RRC. And as the convenor of that sub-group, he has not called any meeting till the issues raised by him are addressed.
While the issues raised has not been addressed, it is learnt that moves are afoot to replace that IRDAI official with another one.
The RRC was set up by the two insurance industry bodies - the Life Insurance Council of India and General Insurance Council of India - on September 6, 2022 - based on IRDAI's letter dated July 29, 2022.
"Not even once has the RRC sub-group of the intermediaries met once. The meeting has to be held fast," K.C. Lokesh, Convenor, Confederation of General Insurance Agents Associations of India, told IANS.
He also said the main committee or the RRC does not have any representation from the 40 lakh insurance agents, which should be corrected.
Sumit Bohra, Chairman of the sub-group and President, Insurance Brokers Association of India (IBAI) told IANS, that: "There is no representation of the insurance brokers in the RRC. Further the sub-group to study the existing regulations and recommend the changes has not met even once."
Bohra told IANS that S.N. Jayasimhan, Chief General Manager (Intermediaries), IRDAI and the Convenor of the RRC's sub-group on the Unified Regulations for Insurance Intermediaries, had raised several issues relating to the RRC.
Replying to Bohra's letter on the issue of not calling a meeting of the sub-group, Jayasimhan said he had flagged many regulatory concerns while going through the Order that was finalised in respect of the main RRC and various sub-groups.
Jayasimhan said he had shared a note on the regulatory concerns with N.S.Kannan, RRC Chairman and CEO, ICICI Prudential Life Insurance, Tapan Kumar Singhel, Co-Chair and MD & CEO, Bajaj Allianz General Insurance, Naveen Tahiliyani, Managing Director, TATA AIA Life Insurance and few others including Bohra.
"This apart, as IRDAI Legal Department was coordinating the efforts of the exercise, I had informed of the same to Mr Nithyanandam (IRDAI official) as well," Jayasimhan said in his mail to Bohra.
Jayasimhan declined to comment when contacted by IANS for clarifications on issues mentioned in the email to Bohra.
"As you have desired to know the status of Sub-Group's progress, I would like to point out that the Legal Department or none from Mr N.S. Kannan, Mr Thapan (Tapan) Singhel, Mr Navin Thaliyani (Naveen Tahiliyani), including you had provided any answer on how the issues pointed out have been addressed/resolved, to enable a coordinated approach to bring the Regulations as required," Jayasimhan said.
The core contention of Jayasimhan is that IRDAI cannot allow the industry bodies to frame the regulations, which the Parliament has delegated to it.
The key issues flagged off by Jayasimhan are that the terms of reference of RRC do not include governance, operation process, standard operating procedure and its confirmations.
Also, it mentions non-availability of common methodology to consolidate the effort, conflict of interest in making the officers of IRDAI to work with the industry, where IRDAI is attempting to discharge its Regulatory mandate through Councils or through Insurers in RRC.
According to Jayasimhan's mail, IRDAI officers can be just convenors to bring coordination amongst the stakeholders and not members.
Further, the mail mentions that the convenors and Chairmen of sub-groups are not part of the RRC which will finally result in not having a proper coordination of sub-group efforts.
In specific, the mail points out that "Outside legal experts, who were not involved in Insurance Operations will at best be only editing the language without the knowledge of Insurance Business.
"Hence, the RRC should identify a Legal/Compliance Officer with adequate experience and exposure to Insurance Business to be involved at sub-group level, before the same is submitted to the RRC," he had opined.
On the contrary, the RRC has engaged a law firm to work on the regulations.
According to Jayasimhan, the RRC should have a Past President of Institute of Chartered Accountant of India (ICAI) as one of its Members as Accounting and the IFRS squarely is in the territory of the ICAI and the mandate of implementing the IFRS is also with the ICAI.
Further, it is through the Past President of the ICAI, all accounting and IFRS requirements need to be frozen to make the necessary recommendations to ICAI's President, who is a Member in the Board of IRDAI, Jayasimhan told Bohra.
Meanwhile, the RRC was given two months time to submit its report when it was set up on September 6, 2022.
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