annual report 2008-09 - IRDA

ANNUAL REPORT 2008-09
(b)
LIC, is non-compliant with its obligations in the
rural sector during 2008-09, underwrote a lower
number of policies in rural sector, than the
prescribed 25 percent for 2008-09.
Social Sector Obligations: All the twenty one
private life insurance companies fulfilled their
social sector obligations during 2008-09. The
number of lives covered by them in the social
sector was above the stipulated obligations.
LIC complied with its social sector obligations and
covered a more number of lives than the
prescribed 20.00 lakh as obligations for 2008-
09.
Obligations of non-life insurers:
(a)
(b)
Rural Sector Obligations: Out of the fifteen private
sector non-life insurers except Bharti Axa &
Apollo DKV all others met their rural sector
obligations in 2008-09. The gross direct premium
underwritten by them in the said sector, as a
percentage of total premiums underwritten in
2008-09, was above the prescribed stipulations.
All the four public sector insurers have complied
with the rural sector obligations for 2008-09, with
seven per cent of the quantum of insurance
business done by them in the accounting year
2008-09.
Social Sector Obligations: Among the private
sector non-life insurers, except Bharti Axa &
Apollo DKV, all others met their social sector
obligations in 2008-09. The number of lives
covered by them in the social sector was also
higher than the regulatory stipulations.
All the four public sector insurers complied with
the social sector obligations for 2008-09. The
public sector insurers prescribed obligations for
the financial year 2008-09 are 10 per cent above
the target of 2007-08 in the number of lives
covered by the respective insurer in the Social
Sector or 5.50 lakhs, whichever is higher.
vii. Financial Reporting and Actuarial Standards
I. Financial Reporting
Additional measures were taken by the Authority
to improve transparency and disclosures in
reporting the financial statements
1. Effective from the financial year 2008-09
onwards, all insurers have been advised to file
details of penal actions taken by various
Government authorities. The said information is
required to be duly certified by the Statutory
Auditor of the insurer.
2. Insurers are also advised to file a Return on an
annual basis giving details of Chartered
Accountant firms engaged in various capacities
like Statutory Auditors, Internal Auditors,
Concurrent Auditors, Tax Auditors and other
Auditors
3. The Guidelines on “Corporate Governance for
the Insurance Sector” will be effective from the
financial year commencing April 01, 2010. The
guideline provides for constitution of Board and
other sub-committee and also has a provision
for “whistle blowing” policy. The format of filing
Compliance Report is under process and shall
be notified in due course.
II (a) Appointed Actuary System
One of the main areas which engage the attention of
actuaries is the assessment of financial risks in the
operation of the insurance companies so that the
products sold by them do not contribute to financial
risks. In this context they ensure that the solvency of
the company is maintained at all points of time.
The Authority introduced the system of Appointed
Actuary (AA) in the year 2000. During 2003-04, the
Authority notified the ‘Qualification of Actuary’
Regulations, defining an Actuary for the purpose of
the Insurance Act, 1938. The powers and duties of
an Appointed Actuary are laid down by the Authority
in the Regulations.
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