IRDA has asked insurance companies to submit a report informing their investment pattern and periodic returns in a standardized format within 30 days from the end of the quarter. Industry experts have opined that the regulator might be trying to standardize the existing system so as to make it more user friendly and easy. However, IRDA has also hinted that the systems and processes should keep pace with the changing business environment.
IRDA has recently issued a guidance note on preparation of investment returns. In the guidance note, IRDA has said “The systems and processes put in place should enable the regulator to watch growth and channelize the same to the needy sectors without compromising on the safety aspects. Such information, to benefit of all stakeholders, including the regulator, requires to be taken in the electronic form. In this effort of collating huge volume of information, it is essential that the information data is standardized to facilitate proper consolidation and meaningful comparability within and among insurers.”
IRDA notes that the insurance industry has grown by a remarkable 513 percent in last 13 years i.e. from Rs 2.91 lakh crore of AUM in 2000 to Rs 17.83 lakh crore of AUM in 2013.
IRDA has asked the insurers to submit complete data on statement of investment and income on investment, statement of downgraded investment, investment assets-rating profile, investment asset and infra investment-rating profile, statement of investment assets, exposure norms compliance, statement of investment reconciliation, statement of investment in mutual funds, details of non-performing assets and certificate under section 28 of insurance act, 1938.
A senior person from a private insurance company said that perhaps IRDA is planning for next phase of development. Earlier, there was only one insurance company but now there are plenty of insurance companies to deal with. Hence, to meet with these existing as well as upcoming challenges, the insurance regulator is preparing for developing an automatic route which would provide entire information of the insurance companies at a single click.
Another senior person from a private insurance company said that the IRDA needs necessary information about insurance companies like asset, liability, income and NPA so that they could work on developing a better platform to compare various insurance companies.