IRDA finalising merger and acquisition norms for insurance firms

The Insurance Regulatory and Development Authority of India (IRDA) is in the process of finalising detailed guidelines for mergers and acquisitions in the insurance sector, IRDA chairman J Hari Narayan told a national summit on `Indian Insurance Industry', organised by the Associated Chambers of Commerce and Industry (ASSOCHAM).

The insurance sector regulator is also looking at the possibility of raising the existing commission rates for insurance agent, in order to increase productivity, he said.

Hari Narayan said the IRDA and capital market regulator SEBI are currently engaging stakeholders ahead of finalising the merger and acquisition guidelines in insurance sector.

"Since the process is just begun between IRDA and SEBI, it would take couple of months before the IRDA unveils such guidelines to give a new dimension to insurance sector", said Narayan.

He said the insurance penetration level in the country is still far too low and the regulator was looking at raising commission rates so as to motivate insurance agents, especially in the rural areas.

In this context, the IRDA chairman suggested the idea of representation for insurance agents on the boards of insurance companies.