The insurance sector will be moving towards paperless model in a year, said Insurance Regulatory and Development Authority Chairman J. Hari Narayan here on Friday.
Talking to presspersons on the sidelines of a CEOs' Round Table on ‘Addressing Distribution Challenges in Insurance', Mr. Hari Narayan said the IRDA was working on the data repositories and contractual liabilities to suit the requirements of a paperless insurance industry.
“About three to four companies were shortlisted to manage the repository. To begin with, five crore to six crore insurance policies taken by consumers in a year could be fed into the database while the backlog data would be gradually ported,” he said.
It would function like National Securities Depository Limited (NSDL) that handled most of the securities held and settled in dematerialised form in the Indian capital market, he said.
At a time when the insurance sector was likely to end with a de-growth of 13 to 14 per cent in the current fiscal , a review of the sector after it was opened up for private players 10 years ago was very much in place. The Bill to seek amendment to Insurance Act, to take reforms forward was being considered by Parliament, he added.
The present insurance penetration rate of 4.4 per cent of GDP was not low as in other countries it was 3.5. “We should instead focus on GDP growth as it is linked to sector's growth', he said.
Mr. Hari Narayan said he was sceptical about the argument that lesser regulations would get better performance from the sector. The sector should focus on winning the trust of people that their savings in insurance schemes would get good returns. At present savings majorly went into gold or land, he added.
On the recommendations of the round table to push the growth of distribution channels of insurance, be it bancassurance, agents, broking firms, direct sales, Mr.Hari Narayan emphasised the sector could not follow other countries as India should adopt what was suitable to its operational practices. “Next financial year we will take a view on Bancassurance reforms,” he said.
