An over two-month delay by the centre to appoint the new IRDAI chairman following the retirement of former chairman Subhash Khuntia on May 6, is impeding regulatory progress and causing business disruptions for India’s insurance sector amid the coronavirus pandemic, according to industry stakeholders.
Insiders claim that the backlog of crucial policy considerations as well as routine clearances are getting delayed even as companies themselves are suffering from a possible lack of regulatory oversight. These concerns have been further exacerbated as the country’s insurance sector has taken a massive hit on finances in recent years in the quarter owing to the devastating second wave.
Highlighting one such concern, an industry executive requesting anonymity said: “The renewal of reinsurance Unique Identity Numbers (UIN) has been stuck for several weeks now in the general insurance category. These are routine clearances and delays are affecting the pricing of policies being offered to brokers and customers alike.
A mail written to Insurance Regulatory and Development Authority of India (IRDAI) didn’t elicit a response till press time.
The chief executive of a general insurance firm said that the absence of head at IRDAI is also affecting clarity on key industry considerations. For instance, third-party motor insurance rates which are specified every year by the regulator has not been stated for FY22. “The rates were not specified in FY21 as well due to covid-19. This means that insurers are operating on rates specified in FY20 over two years ago,” the executive said. The executive added that the absence of an IRDAI head could be behind these backlogs. Former chairman Subhash Khuntia vacated the office on May 6th after which the position is lying vacant.