Disclosure Standards in Indian Life Insurance Industry

1
Disclosure Standards in Indian Life Insurance
Industry

• Dr. R. Kannan
• Member (Actuary)
• I R D A
• Hyderabad1

2
Benefits of transparency

• Prospective policyholders can take informed
  decisions by comparing various products available
  in the market
• Corporates can buy products to suit their
  requirements
• Investors can assess the real strength of the
  insurer and then take informed decisions
• Regulator can compare the performance of insurers
  in a meaningful manner
• Regulator can position appropriate prompt
  corrective action framework
• This will help the industry to avoid any
  financial shock and thereby avoid any contagion
• To position proper corporate governance
  principles

3
Transparency requirements at various levels

• Policyholders give correct information about
  age, salary and health
• Insurers
• When benefits become payable
• Exclusions
• Non-forefeiture clause
• Definition of pre-existing illness
• Charges in the case of ULIPs
• Money available for investment
• NAV

4
Transparency requirements at various
levelsContd.,

• Payments made to intermediaries
• Related party transactions
• Annual Report
• Valuation of assetsimpairment of assets
• Liability valuation
• Asset-Liability management
• Reinsurance limits
• Lapse data
• Grievances data

5
Steps taken by IRDA to improve transparency

• Data dissemination
• Benefit illustration
• NAV disclosure
• Lapse, claims, investments disclosure

6
Agenda for the future

• Transparency is a necessary condition but not
  sufficient one
• Consumer education
• Policy and Claims documents in vernacular
  language
• Publication of claims settlement period
• Publication of annual report and profit and loss
  account
• Grievance redressal mechanism

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• Thank you