The Insurance Regulatory and Development Authority of India (IRDAI) is looking at strengthening the grievance redressal system for policyholders who have complaints against insurance companies, IRDAI Chairman Debasish Panda said on June 16.
“Work is in the progress. There is also a proposal from the government through a new legislation to build a more robust grievance redressal mechanism. We are examining it at our level. The work is on. Going forward, we will have a much better platform for claim settlement, processing and grievance redressal,” Panda said on the sidelines of an Insurance Brokers’ Association of India (IBAI) event in Mumbai.
He said efforts are on to improve the customer protection framework.
“We are trying to work with the entire insurance ecosystem to find better solutions so that that the claim journey for customers becomes frictionless. Although the industry has paid out claim worth around Rs 80,000 crore, some do get left out and there are pain points. So how do we resolve (these issues)? The industry is working on it and we are monitoring,” said Panda.
He also emphasised the need for the insurance industry to adopt emerging technologies to design products and underwrite risk. “For example, all individual financial data is being aggregated by through the account aggregator framework. All the financial data is aggregated at one place to be used by banking companies, insurance companies etc to assess risk and offer products and price," he said. If the customer does not have, say, credit history, entities can explore other avenues to ascertain the risks. "Now suppose a customer does not have financial, digital or credit footprint… is new to banking or insurance - then, they can look at alternative data to get an idea of creditworthiness. That is how technology is evolving. So stakeholders should think of (newer) technologies available, which will perhaps lead to better, more prudent underwriting and pricing,” he said.
Panda also reiterated the need for insurance companies to focus on newer customer segments such as gig workers, gen Z, millennials and so on and look at designing specialised products for these categories.
Also read: Moneycontrol-SecureNow Ratings: Your guide to picking the right policy
IRDAI is focussing on ensuring efficient capital utilisation by ushering in the risk-based capital (RBC) regime, moving away from the factor-based solvency capital regime.
“Traditionally, we have been looking at liquidity risk, capital risk…today, governance risk, management risk, operational risk and more importantly, geopolitical and climate change risks – everything has to be factored in. So, a macroeconomic outlook will have to be adopted to make sure that insurance companies are healthy and safe. We are working with a global agency called the Toronto Centre for a 360-degree risk-based supervision framework,” Panda said.
In May, he had said that the regulator would ask insurance companies to adopt the RBC regime over the next 2-3 years.
Work is also on to eventually move towards International Financial Reporting Standards (IFRS). “We are trying to make the industry future-ready,” he said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
