The IRDA has also identified Life Insurance Corporation of India, The New India Assurance Company Ltd and General Insurance Corporation of India as Domestic Systemically Important Insurers (D-SIIs) for FY 2024-25
Oben Ventures LLP (promoted by Kamesh Goyal) and FAL Corporation (backed by Prem Watsa with Fairfax Financial Holdings Limited as its ultimate parent company) will be the promoters of Valueattics Re, The Company will start with an initial paid-up capital of Rs 210 crore to begin operations
Hyderabad/Bengaluru: Insurance regulator IRDAI’s board met under the chairmanship of Debasish Panda on Wednesday and has approved a license, R2, for the first private sector Indian reinsurance company, Value Attics Reinsurance Limited, set up by Canadian billionaire Prem Watsa’s Fairfax group and Kamesh Goyal.
“Approval was accorded to grant Certificate of Registration to M/s Valueattics Reinsurance Ltd. It is the first reinsurer to be granted registration to carry out exclusively reinsurance business in the revamped regulatory landscape. It marks a significant step in fostering competition in the reinsurance sector,” said the IRDAI .
The IRDAI Board meeting was orginally scheduled on Mar 24 but was preponed to March 12.
Fairfax subsidiary FAL Corporation will be the majority stakeholder of Valueattics Reinsurance Limited. Fairfax Financial Holdings Limited, a holding company through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance.
Oben Ventures LLP (promoted by Kamesh Goyal) and FAL Corporation (backed by Prem Watsa with Fairfax Financial Holdings Limited as its ultimate parent company) will be the promoters of Valueattics Re, The reinsurer will start with an initial paid-up capital of Rs 210 crore to begin operations.
Though Watsa’s Fairfax group and Goyal, who had already promoted general insurance company Go Digit General Insurance and Go Digit Life Insurance, had announced their plans to set up a private domestic reinsurance company in the country some time ago, the proposal had not moved ahead in the IRDAI earlier.
Value Attics was incorporated on Dec 20, 2017.
In December 2018, the IRDAI rejected a proposal from Go Digit, to acquire ITI Re, which got a license from the IRDAI in 2016 but surrendered it back to the regulator after two years without doing any business .
ITI Re was set up by Sudhir Valia backed The Investment Trust of India.
Currently, state owned GIC Re is only Indian reinsurer and enjoys the advantage of first right to refusal and obligatory cession.
There are also 12 foreign reinsurance branches(FRBs), set up by global reinsurance companies, including Munih Re, Swiss Re, Lloyd’s of London, operating in India.
However, no other business decisions were taken during the meeting as Panda’s tenure is ending on Thursday. It was the last board meeting of the IRDAI under the chairmanship of Panda, who will be completing his three-year tenure at the regulatory body on Mar 13.
Panda had met different departments of IRDAI on Tuesday and had advised them to carry on the good works for the growth of the Indian insurance industry.
According to sources, Panda pointed out that the IRDAI during last three years has been able to bring about a great deal of changes in the insurance industry and is now waiting for new Amendment Bill to further transform the industry.
The IRDA has also identified Life Insurance Corporation of India, The New India Assurance Company Ltd and General Insurance Corporation of India as Domestic Systemically Important Insurers (D-SIIs) for FY 2024-25 .
Status update on the Bima Sugam – Insurance Electronic Marketplace
A status update was provided to the IRDAI board as regards compliances, activities and processes of Bima Sugam India Federation (BSIF), an entity formed by the insurers to set up the Insurance Electronic Marketplace – the Digital Public Infrastructure being set up under the IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations,
2024.
The board also took stock of of the progress made in future ready initiatives like Indian Risk-Based Capital (RBC),Ind AS (converged IFRS) and Risk Based Supervisory Framework.
The board also discussed the status of the IRDAI promoted entities viz., Insurance Information Bureau of India (IIBI) and Institute of Insurance and Risk Management (IIRM) .
A status update was discussed by the IRDAI board on the progress made in the ‘State Insurance Plan’ an initiative under the development agenda envisaged to be a catalyst for insurance inclusion and lay the groundwork for achieving the vision of Insurance for All by 2047.
There were also deliberations on Master Scheme formulated under this initiative to formalise and give further momentum to the efforts. As per the scheme which is currently under active consultation, the State Insurance Plan will be supported by a multi-tiered governance model at the state, district, urban and gram panchayat levels to facilitate localized identification of protection gaps and coverage thereof.
A central feature of the Master Scheme is the focus on ensuring phygital presence of insurers across all states, coupled with a centralized Mission Office to oversee the plan’s execution as well as monitoring its progress.
The board meeting reaffirmed IRDAI’s commitment to a robust, transparent and forward-looking regulatory ecosystem for the Indian insurance industry. The Authority ccontinues to work towards ensuring financial stability, policyholdercentric innovations and streamlined governance practices.
The IRDAI Board will also soon have a new part time member from the government as M.P. Tangirala additional secretary, Department of Financial Services (DFS), who has been a government’s part-time member in the IRDAI, has been shifted to TRAI as a whole-time member of Telecom Regulatory Authority of India(TRAI).
The government is yet to post a new additional secretary at the DFS.
Though expectations were running high that Panda may get extension to pursue his high growth agenda for the industry for some more time, it has not happened and the government has already advertised for the post on Sunday evening.
Many new promoters, like Westbridge Capital joint venture(JV) with Nilesh Garg, Sam Ghosh’s Cosmea Financial Holding along with a partnership Qatar Insurance Group, M Pallonji Group JV with True North, for setting up general insurance companies will be soon lining up for getting licenses, R2, from the IRDAI.
Kamesh not Kamlesh
Instead of bureaucrats, the govt should appoint some professional as chairperson of IRDAI . Bureaucrats don’t understand the business of insurance. Insurance is a matter if solicitation. It is true that today bancassurance is a forced selling legalised by bureaucrats . Banks branches seem to be more of an insurance outlet than banking one .
This is true because insurance is one of the highest revenue generating products. Hence higher authorities in Banking system also give immense pressure on their staffers to sale the insurance. As a result empoloyees are compelled to sell the insurance products without identifying the customers needs and actual requirements as well as hiding right informations about product’s features and benefits.
The approval of Value Attics Reinsurance Ltd marks a significant milestone in the Indian insurance sector. However, despite the entry of new insurance companies, overall insurance penetration in India remains a challenge.
To enhance penetration, the focus should shift from merely adding new insurers to strengthening the distribution network by bringing in more professional distributors. IRDAI and the government should consider easing the regulatory framework for distribution houses, such as insurance broking, aligning it with the Regional & National Distributor model in the mutual fund industry.
Furthermore, the dynamic shifts in insurers’ preferred segments based on claim ratios make it increasingly difficult for individual agents to sustain long-term associations with a single insurer. Introducing a sub-broking license and incentivizing companies operating in rural markets would encourage deeper market reach and financial inclusion. A balanced approach to regulation and distribution can significantly accelerate insurance adoption across the country.
The health insurance penetration in India is indeed relatively low, and there are several challenges contributing to this issue. Here are some possible reasons:
Regulatory Challenges
1. *IRDAI regulations*: The Insurance Regulatory and Development Authority of India (IRDAI) has strict regulations, which can limit innovation and flexibility in health insurance products.
2. *Lack of standardization*: There is no standardization in health insurance policies, making it difficult for consumers to compare and choose the right policy.
Affordability and Awareness
1. *Affordability*: Health insurance premiums can be expensive, making it unaffordable for many Indians, especially those in rural areas.
2. *Lack of awareness*: Many Indians are not aware of the benefits of health insurance or do not understand the complexities of health insurance policies.
3. *Low financial literacy*: Limited financial literacy among Indians can make it difficult for them to make informed decisions about health insurance.
Healthcare Infrastructure and Quality
1. *Limited healthcare infrastructure*: India’s healthcare infrastructure is still developing, particularly in rural areas, making it difficult for insurers to provide comprehensive coverage.
2. *Quality of healthcare*: Concerns about the quality of healthcare in India can make it challenging for insurers to provide effective coverage.
Distribution and Marketing
1. *Limited distribution channels*: Health insurance products are often sold through traditional channels, such as agents and brokers, which can limit reach and accessibility.
2. *Inadequate marketing*: Insurers may not be effectively marketing their products to raise awareness and drive sales.
Government Policies and Schemes
1. *Government-sponsored schemes*: Government-sponsored health insurance schemes, such as Ayushman Bharat, can create confusion and overlap with private health insurance products.
2. *Taxation policies*: Taxation policies, such as the Goods and Services Tax (GST), can increase the cost of health insurance premiums.
Demographic and Socio-Economic Factors
1. *Aging population*: India’s aging population can lead to increased healthcare costs and higher premiums.
2. *Rural-urban divide*: The rural-urban divide in India can create disparities in access to healthcare and health insurance.
3. *Income inequality*: Income inequality in India can make it difficult for low-income households to afford health insurance.
Addressing these challenges will require a multi-faceted approach, involving regulatory reforms, increased awareness and education, improved healthcare infrastructure, and innovative distribution and marketing strategies.
Sir,
A limited number people who are aware of intricacies of an insurance policy, they can get benefits from these insurers. So, pls exempt rural villagers from this
After spending lakhs of rupees as medicine and doctors, nursing and hospital charges, insurer is denying my claims
What I have to do?
Kamboj sir, You are accepting that insurance is a solicitation matter.
I think, actually, primary aim of insurance is to provide financial protection of needy members of society
But a secondary definition of business is required. A bureaucrat or a professional, they have to change entire meaning of solicitation and make humanistic
A clause 4.2 is breaking all solicitation and corores of disputes of insureds are running in court of law .
Insurance is not providing or covering all diseases in health, there is a long list of diseases for which insurers reject claim and they need to and upgrade their business
All of us should make effort to cover all diseases by insurer and clause 4.2, about permanent exclusions disease from insurance cover, should be removed.
Sir if insurance will cover limited number of diseases then how insureds will feel safe?
Open architecture bill should be implemented ASAP for faster insurance penetration.