The Insurance Regulatory and Development Authority (IRDAI) board meet is expected to be held next week, probably on November 25, sources informed CNBC-TV18. The board is likely to discuss expenses of management (EoM) limit and re-insurance norms in the meet, sources said.
On expenses of management limit, insurance regulators are likely to set a limit in terms of EoM for all three standalone health insurance, general insurance as well as life insurance companies.
Expenses management is the sum total of the commission that an insurance company pays plus its direct expenses. So, a limit on that is likely to be set by the insurance regulator.
Insurance Advisory Committee has sort of recommended and proposed 11 amendments for consideration in the meet.
"Out of those 11 amendments, four important things which are proposed would be the regulations on expenses of management and the limit to be set there. The second one could be architecture for insurance companies in terms of distribution. The third one could be reinsurance regulations and the fourth one would be registration of insurance companies," sources said.
The insurance regulator is likely to discuss allowing banks to tie up, distribution tie-up with nine life, nine health, and nine general insurance companies. Currently, they are only allowed to tie up with three life, general, and standalone health insurance companies.
The insurance regulator may also consider the removal of order of preference which at this point of time favours GIC Re in getting them reinsurance contracts. These regulations could put foreign reinsurance branches on par when it comes to the preference with GIC Re.
The fourth and final is the registration of insurance companies.
Additionally, there could be amendments around the threshold for promoter classification that could be taken higher to 25 percent from the current 10 percent. Finally, amendments may specify a lock-in period for investors of these insurance companies.
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(Edited by : Anshul)
First Published: Nov 17, 2022 1:42 PM IST
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