Framework

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Will be an improvement over the existing table as it will be based on latest mortality and claim experience of different life insurers.

The variation in mortality across regions and gender will be incorporated in the next table, expected within one or two years.

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Manish Basu

Kolkata, June 12 The proposed new table for mortality rates, awaiting Insurance Regulatory Development Authority (IRDA)'s approval in August, would be finalised on the basis of the latest mortality experiences varying across ages, Mr R. Kannan, Member (Actuary), IRDA, told Business Line, adding that the variations across regions and gender might be factored in after a couple of years.

The Mortality and Morbidity Investigating Centre, an affiliate of the Institute of Actuaries of India (IAI) and the Life Insurance Council, would submit a draft of the new table to IAI on June 26, to be forwarded to IRDA thereafter for necessary approvals, he said.

"The new table will be an improvement over the existing table as it will be based on the latest mortality and claim experience of different life insurance companies. The variation in mortality across regions and gender will be incorporated in the next table, expected within one or two years,"he said. The next table he pointed out, might also include some issues related to morbidity such as incidence of accidents and diseases. Morbidity, in the insurance dictum, is the risk of living too long; and depends on the frequency of injuries, illness and disabilities.

According to the chief actuary of a private sector life insurance company, a revised table will be more meaningful if it contained region specific mortality rates. "In a diverse country like India, and with vast difference in mortality rates between the urban and rural population, regional variations should be factored in for preparing the table," he said.

In the US, the sector is highly regionalised with each State having a different insurance regulation norm.

MMIC has already collected the requisite data from most insurance companies for the period 2001-2006, the base period for the table, Mr Kannan said. The current table is based on LIC's data alone for the period 1994-96. “There is a significant improvement in mortality rates across all ages, particularly in the young age, since 1996,” he said, adding that the new table would be useful for insurance companies in streamlining the pricing of policies based on latest data.

IRDA, Mr Kannan pointed out, might take a call on asking the life insurance companies to reduce premium rates following the revised mortality rate only after examining the new table.