Malhotra recommendations

Print edition : November 02, 2012

R.N. Malhotra, former RBI Governor.-

A COMMITTEE was set up in 1993 under the chairmanship of R.N. Malhotra, former Governor of the Reserve Bank of India, to make recommendations for reforms in the insurance sector. The Malhotra Committee recommended introduction of a concept of professionalisation in the insurance sector to make out a strong case for paving the way for foreign capital.

In its report submitted in 1994, the committee recommended, among other things, that:

Private players be included in the insurance sector.

Foreign companies be allowed to enter the insurance sector, preferably through joint ventures with Indian partners.

The Insurance Regulatory and Development Authority (IRDA) be constituted as an autonomous body to regulate and develop the insurance sector.

The key objectives of the IRDA would include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums while ensuring the financial security of the insurance market.

Brokers representing the customer be brought in as another marketing and distribution channel, a practice prevalent in most developed markets

Raise the level of professional standards in risk management and underwriting and speed up settlement of claims.

Following the recommendations, the IRDA was constituted as an autonomous body in 1999 and incorporated as a statutory body in April 2000. With the coming into force of the IRDA Act, 1999, the insurance industry was opened up to the private sector.

Sagnik Dutta

A letter from the Editor


Dear reader,

The COVID-19-induced lockdown and the absolute necessity for human beings to maintain a physical distance from one another in order to contain the pandemic has changed our lives in unimaginable ways. The print medium all over the world is no exception.

As the distribution of printed copies is unlikely to resume any time soon, Frontline will come to you only through the digital platform until the return of normality. The resources needed to keep up the good work that Frontline has been doing for the past 35 years and more are immense. It is a long journey indeed. Readers who have been part of this journey are our source of strength.

Subscribing to the online edition, I am confident, will make it mutually beneficial.

Sincerely,

R. Vijaya Sankar

Editor, Frontline

Support Quality Journalism
This article is closed for comments.
Please Email the Editor