IRDA backs FM-led panel to resolve turf wars

The Insurance Regulatory and Development Authority has backed a government decision to create a committee headed by the finance minister to resolve turf wars among regulators, but is not so sure about the proposal for a financial stability and development council or FSDC.

''We will firm up our views on the FSDC shortly. The question is... whether there is a need for such a forum,'' said IRDA chairman J Hari Narayan in an interview to The Economic Times.

In common with other financial sector regulators, IRDA has backed an existing forum - the high-level committee on capital and financial markets (HLCCFM) - saying it is fulfilling its mandate of co-ordinating between regulators.

The last few weeks have seen an unprecedented public airing of disagreements with government policy by two of India's regulators, the Reserve Bank of India and the Securities and Exchange Board of India. The RBI has expressed its disquiet over a provision in an ordinance which empowers a panel headed by the finance minister to resolve disputes between regulators on the ground that its autonomy could be at risk. The ordinance resolved a dispute between IRDA and SEBI over who should regulate unit linked insurance plans or ULIPs.

In the 18 June ordinance, the government came down on the side of the insurance regulator.

Not surprisingly, IRDA supports the proposed dispute-resolution mechanism.