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Indian insurance watchdog, the Insurance Regulatory and Development Authority (IRDA), says that there is no need to tighten the regulatory regime because existing solvency requirements are adequate.
IRDA member, R Kannan, says that there is no necessity to be anxious of the global financial crisis because the solvency margins of private insurers in India are higher than their liabilities. At present, insurers have to maintain a solvency margin of 150% of uncovered liabilities.
"That prudential norm is helping us and 50% is the cushion that we have", he said, adding that insurers in India are well-capitalised.
He says that the IRDA is awaiting reports from Tata AIG about its life and non-life businesses in India. These are joint ventures between the Tata Group, which holds a 74% stake, and AIG which owns the remaining 26%. Both ventures observe India’s solvency requirements and are adequately capitalised.
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