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Time of India
24-07-2025
- Business
- Time of India
Govt appoints Ajay Seth as new IRDAI chief
Mumbai: The government has appointed Ajay Seth, a retired 1987-batch IAS officer and former finance secretary, as the new chairperson of the Insurance Regulatory and Development Authority of India (IRDAI), for a three-year term or until he turns 65, whichever is earlier. The decision, approved by the Appointments Committee of the Cabinet, ends a nearly four-month leadership vacuum at the regulatory body. Seth, who is the sixth IAS officer to head the regulatory body, has a long experience in economic policymaking. He most recently served as finance secretary, and before that, as secretary of the Department of Economic Affairs. He also briefly held charge of the Revenue Department, overseeing both direct and indirect tax administration. His earlier assignments include a stint at the Asian Development Bank and leadership of Bangalore's metro project. As a key architect of India's post-pandemic macroeconomic policy, Mr Seth was responsible for shaping union budgets, issuing sovereign green bonds, and spearheading infrastructure finance initiatives. His elevation to IRDAI suggests that the government expects him to push through long-pending reforms in the insurance sector—some of which have been on hold since his predecessor, Debasish Panda, demitted office in March. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like You Won't Believe the Price of These Dubai Apartments Binghatti Developers FZE Get Offer Undo Seth will have to deal with considerable reform backlog. The much-touted Bima Sugam digital platform, designed to allow policy comparison and servicing in one place, has missed its rollout deadline. Bima Vistaar, aimed at rural coverage, and Bima Vahaak, a women-led distribution model, are caught in technical and governance snags. Transition to a risk-based capital regime and alignment with international accounting standards have also stalled amid industry unreadiness. Larger proposals—such as permitting 100% foreign direct investment, introducing composite licences, and differentiated capital requirements—remain unlegislated. The idea of listing public sector insurers has met internal resistance and has not yet taken off. Solvency shortfalls at three state-run insurers further compound the regulatory burden. He also takes over at a time when both the finance ministry and RBI have flagged concerns over mis-selling practices, particularly bundled products sold by banks and automobile dealers. Public criticism has grown over opaque claim settlements and low portability in health insurance. There is pressure to emulate mutual fund reforms that brought cost transparency and trust back to retail investors. Mr Seth's challenge will be to restore momentum to reform, clarify the regulatory roadmap, and reorient the sector towards long-term financial inclusion. With trust in the industry fraying and growth flattening, his stewardship will be closely watched. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
06-06-2025
- Business
- Time of India
Leaderless and lagging: India's insurance overhaul stalls without Irdai head since March
Key reforms in India's insurance sector are stuck in limbo following the departure of Insurance Regulatory and Development Authority of India ( Irdai ) chairman Debashish Panda in March. With the top post still vacant since March, the sector is left without regulatory leadership at a time when several major initiatives are awaiting rollout, Times of India reported. The most ambitious of these is Bima Sugam , a centralised digital platform designed to allow customers to compare, purchase, and manage insurance policies online. Although each insurance company has already invested a few crore rupees into the development of this platform, the date of its official launch has still not been finalised. Alongside Bima Sugam, two other major initiatives—Bima Vistaar and Bima Vahaak—are also facing delays. Bima Vistaar is meant to offer bundled insurance coverage to rural populations, while Bima Vahaak is a distribution model driven by women. Both are facing technical and operational hurdles that have stalled their progress. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like An engineer reveals: 1 simple trick to get all TV channels Techno Mag Learn More Undo Plans to shift to a risk-based capital framework and align insurance accounting practices with the International Financial Reporting Standards (IFRS) are also in suspension. These changes were intended to modernise the sector's regulatory oversight and financial disclosures. However, industry unreadiness and lack of clarity around implementation have halted progress. Meanwhile, proposals to allow 100% foreign direct investment in the sector, permit composite licences, and introduce differentiated capital requirements have yet to be passed into law. Plans to list state-run insurers on the stock market are also stuck, facing pushback from within the public sector. Live Events Even as reforms stall, regulatory scrutiny has increased in some areas. The Reserve Bank of India and the finance ministry have raised concerns over banks and automobile dealers forcing customers to purchase bundled insurance products. Regulatory audits have uncovered several worrying practices in retail health insurance, including unclear reasons for claim rejections, steep premium increases, and poor portability. 'If the insurance industry is to grow the way mutual funds did after 2010, we need greater transparency, lower costs, and rebuilt trust,' said Kamesh Goyal, co-founder of Go Digit General Insurance . 'Sebi introduced direct plans and standard charges. Insurance could adopt similar guidelines—such as mandating refunds with interest when loss ratios fall below a certain level.' Goyal said that retail customers were effectively subsidising corporate clients. 'We're not saying distributors shouldn't earn, but loss ratios at 10% are unsustainable. A level of 60-65% is more realistic, accounting for costs and investment income. Once a fair value proposition is in place, mis-selling naturally comes down,' he said. Public sector insurers are also under pressure. Three have breached solvency norms. Even though insurance premiums have grown, the number of individual policyholders has stayed flat, which limits any real gains in financial inclusion. Surety bonds are another area that now demands regulatory attention. These bonds were introduced as substitutes for traditional bank guarantees. But insurers argue they come with higher risk as they lack the protections banks enjoy under existing bankruptcy laws. The delay in appointing a new Irdai chairman has slowed down reform at a time when the insurance industry is in urgent need of clear and forward-looking regulation. (with ToI inputs)
Time of India
05-06-2025
- Business
- Time of India
Irdai chief post vacant since March, reforms stall
MUMBAI: Plans to revamp the insurance sector are in limbo, with key reforms stalling after Irdai chairman Debashish Panda left office in March. The post remains vacant, leaving the sector without regulatory leadership at a time when several major initiatives are awaiting rollout. Tired of too many ads? go ad free now The most ambitious among them is Bima Sugam, a unified digital marketplace for policy comparison, purchase, and servicing. With each insurer having invested a few crore in the platform, its launch plan is yet to be finalised. Bima Vistaar, aimed at rural bundled coverage, and Bima Vahaak, a women-led distribution model, are also facing technical and operational delays. Moves to shift to a risk-based capital framework and align insurance accounting with IFRS remain incomplete. These efforts, meant to modernise regulatory oversight and financial disclosures, have not progressed due to a lack of industry readiness and clarity on implementation. Proposals to allow 100% FDI, issue composite licences, and introduce differentiated capital norms have yet to be legislated. Plans to list state-run insurers have also not advanced amid resistance from within the public sector. At the same time, regulatory scrutiny of mis-selling and poor distribution practices has increased. RBI and the finance ministry have flagged concerns over banks and auto dealers forcing customers to buy bundled insurance. Regulatory audits have revealed issues such as opaque claim rejections, sharp premium hikes, and poor portability in retail health insurance. "If the insurance industry is to grow the way mutual funds did after 2010, we need greater transparency, lower costs, and rebuilt trust," said Kamesh Goyal, co-founder of Go Digit General Insurance. Tired of too many ads? go ad free now "Sebi introduced direct plans and standard charges. Insurance could adopt similar guidelines-such as mandating refunds with interest when loss ratios fall below a certain level." Goyal added that small retail customers are often subsidising large corporate groups. "We're not saying distributors shouldn't earn, but loss ratios at 10% are unsustainable. A level of 60-65% is more realistic, accounting for costs and investment income. Once a fair value proposition is in place, mis-selling naturally comes down," he said. Public sector insurers are also under pressure, with three of them breaching solvency norms. While insurance premiums have increased, the number of individual policies has remained flat, limiting its impact on financial inclusion. Another area needing regulatory attention is surety bonds. Though these now substitute bank guarantees, insurers say they carry higher risk due to a lack of protection under bankruptcy laws-unlike banks. The delay in appointing a new chairman has slowed reform at a time when the sector needs urgent regulatory clarity.
