www.i-securesolutions.in : Protecting interest of the policyholders
Choosing a New IRDA Chief
The choice of the IRDA chief is one of the more important decisions that the government makes that will directly impact the savings and investments that a huge number of Indians make.
Under the current chairman J. Hari Narayan, IRDA has pivoted quite sharply in its attitude towards the industry and the insurance industry has been chafing under the current regime. If he is replaced with an industry insider or with someone who is excessively ‘friendly’ to the insurers, then that will be a setback for the customers of the industry.
To understand why this is the case, one has to appreciate the fact that the last decade—the period from the large-scale entry of private insurers till 2010 was a disaster for insurance customers in India.
Helped by the raging bull market in equities that lasted till 2008, life insurance companies focussed almost exclusively on ULIPs.
As they were then structured, ULIPs had very little element of insurance about them. They were largely equity investment products, somewhat like mutual funds but with high expenses and commissions, poor transparency.
Moreover, the fine print of ULIP investments seemed written to ensure that a good proportion of the policies lapsed after the first few years, having served the purpose of being gutted for the initial commission and expenses.
Hopefully, IRDA’s leadership will find renewed focus on the real goal, which is real insurance for the under-insured.
Read full article at :
http://www.valueresearchonline.com/story/h2_storyView.asp?str=21443
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