Pension reforms, new norms for health insurance soon

NEW DELHI: The Insurance Regulatory and Development Authority (IRDA) hopes that pension reforms would be flagged off shortly to ensure income security for the country''s vast unorganised sector and plans to come up with fresh guidelines for third party administrators to boost health insurance.
"IRDA had submitted a report on pension reforms to Government in October 2001. The discussion is still on. But a decision will be taken soon," IRDA chairman N Rangachary said at the Global Conference on Actuaries in Ficci on Wednesday.
IRDA had given a presentation to the Group of Ministers looking into the crucial issue of pension reforms last year. The government is likely to firm up the roadmap by this fiscal.
Expressing concern over the falling interest rate regime and higher longevity of Indian population, Rangachary said, "Pension policies are under strain. It is here that the expertise of actuaries are going to be tested."
Twelveth Finance Commission chairman C Rangarajan said, with the widening of the economy, the demand for a new type of insurance emerges. Pension needs of a segment having high assured income is different from that of an organised sector, and insurers should go for product innovation, he added.
Life Insurance Corporation chairman SB Mathur said although one-fourth of the Indian population was insured, but pension cover was still very low.
LIC''s premium income from pension schemes rose to Rs 2,560 crore last fiscal from Rs 562 crore in 2000-01 and Rs 200 crore in 1999-2000, he said.
"Although we thought that things were moving towards the right direction, but the fact remains that growth in pension cover was market driven," Mathur said, adding most of the people bought pension plan as the return offered was higher than the prevailing interest rate on most savings schemes.
Apart from pension reforms, Rangachary said the regulator also plans to come up with a fresh guideline making it mandatory for third party administrators (TPAs) to furnish data on health insurance sector and asked actuaries to develop products to cover the dreaded disease of AIDS.
"We will come up with a guideline very soon making it mandatory for TPAs to furnish data to IRDA prospectively on health covers. By March, we will come up with standardised forms and details of data," he added.
Rangachary also asked actuarial community to develop insurance policies which would cover HIV/AIDS.
Referring to the queries in Parliament on why AIDS is not covered, he said, "At present the market won''t touch them. The actuaries should discuss and find a solution. India is facing this problem and actuaries should have a properly designed policy for AIDS."
The IRDA chairman also expressed concern at the lack of adequate policies for rural sector.
"If you are going to serve the public, then you have to design policies for the rural market. I don''t see any development in this area," he said.
Rangachary also said a Bill is on the way to convert the Actuarial Society of India into a chartered institute similar to accounting insitutes of ICAI, ICSI and ICWAI.