Khuntia warns insurance industry of action on low pricing
Earlier, he said the group health insurance sector has high business volumes but the losses are also high. "I would like to give a word of caution here though your share is very high in group health insurance, the loss ratio in group health insurance is also very high and probably it is not very sustainable at present.
"So the insurance companies' intermediaries and policy holders need to unite to create a sustainable atmosphere because in other industries if there is unfair competition industry suffers but the clientele don't suffer. While this has happened in Airlines and telecom industries but we cannot afford that kind of a situation in the insurance industry because insurance is an industry for protection," he further said.
"So if the industry suffers, then clientele also suffers. And as a regulator we would not like that to happen. One should not overcharge and also not undercharge," Khuntia said.
On the issue of state life insurer LIC paring its stake in IDBI Bank, he said "We have reminded the LIC. They have not come forward yet. We made a roadmap then. Hopefully it will be done quickly".
On proposed FDI hike in insurance sector, from 49 per cent to 74 per cent, he said "We have sought opinions of stakeholders on raising foreign holding to 74 per cent. According to the Act 49 per cent is the maximum limit for foreign direct investment. If it goes to 74 per cent naturally the Act has to be amended", he said.
On the issue of Ownership and management change that has to be changed in case FDI hike takes place, he said, "That I don't know. No decision has been taken. We have communicated for stakeholders view to the government".