BWI: IRDA to Evolve for Corporate Governance Norms for Insurance: Mr. Tarun Bajaj, Joint Secretary (Insurance & Banking)

Press release from Business Wire India
Source: The Associated Chambers of Commerce and Industry of India
Thursday, January 29, 2009 04:43 PM IST (11:13 AM GMT)
Editors: General: Consumer interest, Economy; Business: Banking & financial services, Business services, Financial Analyst, Media & entertainment
Release no: 19093
--------------------------------------------------
IRDA to Evolve for Corporate Governance Norms for Insurance: Mr. Tarun Bajaj, Joint Secretary (Insurance & Banking)
Re-Define Auditor's Role, says Mr. Pawan Kumar Bansal

New Delhi, Delhi, India, Thursday, January 29, 2009 -- (Business Wire India) -- Minister of State for Finance and Parliamentary Affairs, Mr. Pawan Kumar Bansal on Thursday stressed need for re-defining role of auditors, independent directors and even regulators in the wake of Satyam episode to pre-empt corporate risks.

Stating this at ASSOCHAM organized National Summit on Indian Insurance: The Way Forward, Mr. Bansal said that the insurance companies in private and public sector must avoid all pit falls and devise ways for transparent corporate governance norms so that investors and policy holders confidence in insurance sector is not shaken.

In the meanwhile, Finance Ministry's Joint Secretary Insurance & Banking, Mr. Tarun Bajaj who was also present on ASSOCHAM Summit in presence of Mr. Bansal disclosed, "Insurance Regulatory Development Authority of India (IRDA) is evolving regulations to ensure fairer corporate governance in public and private insurance companies to best safe investments of lakhs of policy holders and stakeholders as none of these are listed and could be open to risks".

The Deptt. of Corporate Affairs must be reshaping role of independent directors for corporate India in general but the IRDA is evolving rules and regulations to put in fairer corporate governance practices in insurance sector as it is extremely vulnerable, said Mr. Bajaj.

He added that since none of insurance companies are listed with stock exchanges, possibilities of corporate risks could arise there and to ensure a halt in them, the regulator might unfold fairer corporate governance guidelines for insurance in future with many more new laws in place.

Mr. Bajaj, however, clarified saying that although the government expects voluntary disclosure of corporate governance norms from insurance players in a very transparent manner.

On a question on inflation, Mr. Bansal replied that with reduced prices of petroleum products, the inflation will further moderate by over a percent and ruled out any possibility of government dictating slash of interest rates on banks as it has to be independently done by them.

The Minister held that in an era when people are loosing jobs, insurance sector can help creating opportunities with innovative products and cover newer areas in nuclear power and satellite technologies.

Mr. Bansal especially made a mention of nuclear energy for insurance purposes as 13 lakh megawatt capacity of power projects would be concluded in next 3 decades which will provide huge scope for insurance coverage.

He said that the government has already introduced a new Bill in the parliament to open up insurance sector for private participation to an extent of 49% and hope that the Bill would have a smooth sailing.

The insurance companies, especially in the government sector have created a Terror Pool to cover Mumabi like happenings with Rs.1500 crore risk management of which Rs.300 crore have already been released within the country.

The Minister also held that 80% of the population still remains uncovered for insurance and called upon the players in the field to spread their wings in rural part so that each house and colony is provided with insurance facilities.

Referring to the role of regulator in insurance sector, Joint Secretary Banking & Insurance said that insurance regulator would also unfold many more regulations in course of times so that insurance sector is completely insulated from any fudging and transparency is maintained in it as the government is more concerned about the lot of lakhs of policy holders.

Speaking on the occasion, Mr. M. Ramadoss, CMD, Oriental Insurance Co. Ltd. who is also Chairman of ASSOCHAM Insurance Committee said that the insurance sector needed to evolve products that are available, acceptable and affordable to ensure its penetration in all parts of the country.

In his address, Secretary General, General Insurance Council, Mr. S L Mohan said that 80% of two-wheelers and nearly 40% of four-wheelers are still not covered with insurance. The need of hour therefore is to spread awakening so that vehicle owners in all segments are given insurance coverage with minimum possible premium.

Among others who spoke on the occasion and projected that the size of insurance sector in next 2 years would touch US$ 60 billion include Secretary General ASSOCHAM, Mr. D S Rawat and its Chairman Capital Market Committee, Mr. S C Aggarwal who is also CMD, SMC Global Securities Ltd.


CONTACT DETAILS
Koteshwar Prasad Dobhal, Director (PR), The Associated Chambers of Commerce and Industry of India, +91 (11) 46550555, pressroom@assocham.com

KEYWORDS
CONSUMER, ECONOMY, BANKING, BUSINESS SERVICES, Financial Analyst, MEDIA

If you wish to change your Business Wire India selection please click on this link http://www.businesswireindia.com/media/news.asp and use your personal username and password to login.

Submit your press release at http://www.businesswireindia.com