Mumbai: The tariff
advisory committee (TAC), the statutory body for fixing tariffs on
domestic non-life
insurance policies, will be abolished by 2005, according to
Insurance Regulatory Development Authority (IRDA) chairman N
Rangachary. Insurers will then be allowed to fix their own
premiums on policies, paving way to competitive pricing on
policies.
Rangachary, however, said
IRDA would intervene in the market on the matter of pricing policy
of the companies in case incidents of unhealthy competition among
the companies surface, leading to undercutting of price, which
could result in insolvency of companies.
IRDA will continue to
play a crucial role even after the market forces take over, and
the interests of consumers as well as the industry will be taken
care of, he said.
In the case of
competitive tariff pricing, corporate risk managers will have to
play a more active role. From being mere facilitators of
insurance, the risk managers must be more knowledgeable about the
products, pricing and discounting, he said.
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