Irdai should only monitor the expenditure management of life insurers: Deepak Parekh
The insurance regulator should hold life insurers accountable only for expense management limits, much like the concept of total expense ratio (TER) in the mutual fund industry, instead of having various rules overseeing their investments and spending, said Deepak Parekh, president of HDFC Life. .
At HDFC Life’s annual general meeting, Parekh said: “Today, life insurers can only sell policies through their branches and through their employees. They cannot, for example, sell NPS under the national pension scheme or health insurance coverages such as mediclaims. All over the world, pensions and life insurance are both an integral part of life insurance because they protect the risks of people. ”
“Therefore, allowing life insurers to distribute products such as health insurance and NPS would help improve the reach of much needed insurance in our country,” he added.
Incidentally, the insurance regulator had set up a committee to study the feasibility of allowing life insurance companies to offer compensation-based health insurance, which is currently done by general and autonomous health insurers only. .
Prior to 2015, life insurance companies were allowed to sell benefit-based products, as well as benefit-based products. But in 2015, the regulator decided to allow life insurance companies to sell benefit-based products, but not indemnity-based products.
Parekh added that insurers must now go beyond their usual commitments and offer complementary and value-added services, including “products of the moment” and services such as hospitalizations, online medical consultations, discounts. in pharmacies, telehealth services. , and more.
Due to the second wave of the pandemic, Parekh said, the business growth of India’s life insurance industry has been hit again. But, starting in the second quarter (T2FY22), business is expected to pick up as various state governments gradually lift restrictions.
“We are operating in an extremely difficult and dynamic environment and we would need to invest in technology, skills and distribution, among other things to stay ahead of the curve,” he said.
Commenting on the economy, Parekh said, the overall impact of the second wave of the pandemic on the Indian economy is expected to be milder and largely limited in the June quarter. And, the economy is expected to grow 8-10% in FY 22, albeit on a weak basis.