IRDA chairman retires: Hari Narayan's legacy

A few hours from now, insurance regulator IRDA will be looking to a new chairman at the helm. J Hari Narayan, who has held the mantle for 5 years now, will retire on February 20. CNBC-TV18's Mitra Joshi and Gopika Gopakumar report that Hari Narayan will leave behind a long list of controversies and some pending work.

In his 5 years as Chairman of the IRDA, Hari Narayan has been no stranger to controversy. The biggest of the lot was his clash with CB Bhave, then chairman of Sebi, over the regulation of ULIPs. His other big  campaign, was again the introduction of Pension Products by insurance companies. His stand on this was that only LIC had the resources to pay investors an annuity. And as his tenure ddraws to an end, Hari Narayan says the sector would have done better, if better products has been in the fray.

"We allowed largely toxic products to invade the market place and destroy the public confidence and precisely that is what happened," J Hari Narayan, Outgoing Chairman, IRDA.

Controversies aside, he is leaving behind a list of work that's been initiated, but not complete. A revamping of the guidelines governing traditional products is still a work in progress... as is the formulation of the Bancassurance Guidelines. The latter, is a battle half-fought... with Hari Narayan maintaining that allowing one agent or a bank to represent multiple insurance companies goes against the grain.

"The entire insurance industry is built on one concept, the agent who actually market the insurance product, the agent is tied to an insurance company, one agent one insurance company. We should not see any logic in the demand by some insurance companies and by most bankers that bank should be allowed to be the agent of more than one insurance company," J Hari Narayan says.

Now, industry is optimistic that the new chairman will go over this list of pending tasks, and may even decide to restart the process on some of them to make way for a more company-friendly atmosphere... especially where Guidelines for Traditional Insurance products are concerned.

GN Agarwal, Interim CEO, Future Generali says "Government has told IRDA that let the new Chairman come and see. I feel the new Chairman when joins will like to relook at the guidelines and take again stock of comments which were submitted or may invite again the comments."

Unfinished agenda aside, what Hari Narayan will be most remembered for, is that he did not just lock horns with his Regulatory counterparts or with insurance companies -- he was not averse to even taking on the finance ministry, if it meant investor protection could score a point -- much like he did when the government allowed LIC a 30 percent exposure to equities.