IRDA'S NEW DISCLOSURE NORMS TO BRING MORE TRANSPARENCY
Mumbai
The Financial Express

In the much awaited draft on disclosure norms, the Insurance Regulatory & Development Authority (Irda) wants insurers to disclose at least four to five years of important data to help policy holders and prospective investors in taking informed decisions. Once finalised, Irda will bring out the guidelines for public disclosure for insurance companies, to be effective from November 1.

The insurers, both life and non-life, have to disclose their balance sheets, premium, commission expenses, operating expenses, on annual, half yearly, quarterly basis, according to the draft.

Besides, they also have to disclose their revenue, profit and loss account. "It is essential that the investors are fully aware of the financial performance, company profile, financial position, risk exposure, corporate governance and the management of the insurance company well before the companies go for their IPO,"Irda has said.The standard on public disclosures for the insurance companies, which has been prepared out of the best international practices as followed by International Association of International Supervisors (IAIS), will strengthen the corporate governance and market discipline. Several insurance companies are set to complete the period of 10 years, which is the statutory period, after which they may be allowed by the regulator to go for the Initial Public Offer (IPO).

It is essential that the investors are fully aware of the financial performance, company profile, financial position, the risk exposure, the corporate governance and the management of the insurance companies well before the companies go for an IPO.

Bhargava Dasgupta, MD & CEO, ICICI Lombard commented the move will definitely bring transparency for the insurance companies in the long term and in all the aspects of the companies. "Also, it will ensure help potential investors know more details about the company. I don't think if it will push up the management costs,'' he said.. Kamesh Goyal, CEO, Bajaj Allianz Life Insurance said the insurers need it. "Exposure from the perspective of persistency and expense overrun should be made as soon as it was possible,'' he suggested..