Transparency is at a premium in IRDAI
Venkatachari Jagannathan (IANS) 18 October 2021
Transparency is certainly at a premium in cash-rich Insurance Regulatory and Development Authority of India (IRDAI) that had earned over about Rs268 crore during FY19-20, mostly from policyholders and has fixed deposits of over Rs1,450 crore, a senior official said.
While prescribing the detailed public disclosure norms for insurers, the IRDAI does not disclose its full accounts in its annual reports, an official, who spoke on condition of anonymity, told IANS.
IRDAI's annual report for 2019-20 does not contain its full accounts: Receipts and Payments Account, Income and Expenditure Account, and the Balance Sheet.
An official told IANS that for fiscal 2019-20, IRDAI had earned a total income of about Rs268 crore and the excess of income over expenditure was a whopping Rs102.44 crore.
IRDAI's asset side of the balance sheet for FY20 is about Rs1,805 crore of which Rs1,644.59 crore consists of investments/fixed deposits, current assets (cash and bank balances, loans and advances, and others), the official added.
The Central government has been asking the IRDAI to transfer its funds to the Public Account of India and withdraw a specified amount at the beginning of the fiscal.
However, the IRDAI has refused to do that.
Twenty years ago, when the IRDAI was set up, its revenue sources were structured in such a way so that it is financially independent of the Central government.
Major source of the IRDAI's revenue is from the annual licence renewal fee paid by insurers.
The insurers pay 1/20th of one per cent of the gross direct premium underwritten in India subject to a minimum of Rs500,000 and a maximum of Rs10 crore.
Industry officials told IANS that IRDAI should utilise its whopping accumulated funds for the benefit of the industry like studying the catastrophic loss regions and the measures to be taken to avoid/minimise the loss of life and property.
Similarly, studies could also be done on automobile design or road building technology so that they are safe which in turn would minimise accidents and loss of life and limb, experts added.
Be that as it may, senior officials told IANS that IRDAI does not follow the Central government's instructions on suo moto disclosures.
According to an official, IRDAI is not sharing information about the domestic and foreign tours of its officials and others.
When information is sought by a citizen paying requisite fee under the Right to Information (RTI) Act, IRDAI, in its reply, provides a weblink thereby making the former spend more money in getting the information.
"Many times, the web link will not work," an IRDAI official said.
IRDAI also avoids many RTI questions saying they are in the nature of a 'query' or the information sought is exempted under the RTI Act, the official added.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
2 years ago
IRDAI favours insr cos. It does not disclose papers submitted by insr cos for hike in premia. In 2020, the hike in my premium was a huge 230% and the matter was just brushed aside by the Ombudsman and IRDAI. My policy lapsed and there is no way for an honorable exit.My 1 lakh , ie., 10 Years premia is now profit to the insr co. And new policy means, I won't be covered for 4 yrs for existing illnesses.This also is profit. The policy holder 's interests ard not safe-guarded by IRDAI. Calls for review of its functioning.
20 oct21
2 years ago
Wonderful reply by Mr. Kamal Garg.
Kamal Garg
2 years ago
Two points:
1. If as per the IRDAI Act and as per the initial set up, it was decided that the revenue source of IRDAI "will work in such a way so that it is financially independent of the Central Government", then, there is nothing wrong in not following Central Government's order to transfer the surplus to Public Accounts of India.
2. I think the surplus available to IRDAI can be utilised for providing a better annuity returns to the senior citizen policyholders of annuity-based insurance products (where the rate of return is pathetically low and even do not beat the inflation).
Replied to Kamal Garg comment 2 years ago
Sir your are right as all investors have to get benifits as they have paid to insurer for long period
Free Helpline
Legal Credit