M&A norms for insurance cos on cards: IRDA

The Insurance Regulatory and Development Authority (IRDA) will in a couple of months finalise directives and detailed guidelines for mergers & acquisitions in the insurance sector as also examine the possibilities to hike the existing insurance agents' commission rates to increase their productivity.

Disclosing this at an Assocham-organised summit on 'Indian Insurance Industry' in New Delhi on Friday, IRDA chairman J Hari Narayan said, "The insurance regulator and the Securities & Exchange Board of India (SEBI) have commenced dialogues to finalise mergers and acquisition guidelines in the insurance sector."

"Since the process has just begun between IRDA and SEBI, it would take a couple of months before IRDA unveils the guidelines to give a new dimension to the insurance sector," said Narayan.

Expressing serious concern on the issue of lower penetration of general insurance, especially in the rural segment, the IRDA chairman said that insurance agents need to be motivated with increased commission facilities to generate larger business and IRDA is examining possibilities to effect upwardly changes in insurance agents' present commission structure."

The IRDA chairman even mooted the idea that insurance agents' representation should be introduced in boards of insurance companies to ensure that every segment of the society is lured to park its surpluses with insurance companies. He, however, did not specify if IRDA is examining this issue from the regulator's angle.