IRDA plans to cap salaries of insurance firm's CEOs

KOLKATA: Insurance regulator IRDA on Wednesday said it is considering to cap the salaries of chief executives of the insurance companies so as to maintain expenses in a reasonable range.

"We are also mulling to cap the managerial remuneration of insurance companies," IRDA Chairman J Hari Narayan told reporters here.

There should be limit on what the policy holders could be charged for paying compensation to the managerial staff, he said.

At present, the remuneration of CEOs are determined by IRDA.

Around 40 life and non-life insurance companies are there in the country.

On allocation charges for Unit Linked Investment Plans (ULIPs), Narayan said that IRDA is also keen to see that some kind of cap is imposed.

Further, he said that ULIPs had become the exclusive domain of the private insurance companies so far.
He, however, expressed satisfaction that the private players were now laying stress on the traditional products. "This is good news for the industry," he said.

While on non-life insurance sector, he expressed concern that the companies were underwriting to an extent which was not sustainable.

This had resulted in increasing losses and financial health of the sector was threatened, he said.
Post detariffing, profits of non-life companies had come down, he said.

Narayan said that the insurance market in India is too crowded and even then there is enough room for more companies to set up shops in the country.