By IANS,
Chennai: The Insurance Regulatory and Development Authority (IRDA), the industry watchdog, has asked the 24 non-life insurance companies to strengthen their actuarial department and have it manned by full-timers.
The authority has asked the non-life insurers to spell their plan of action in this regard.
Actuaries are experts in assessing the financial impact of future events. They enable financial decisions by analysing the past, modeling the future, assessing the risks and communicating what the results mean in financial terms.
Speaking to IANS, R.Kannan, member (actuary) at the IRDA, said: “The actuarial work for non-life insurers is on the rise. For example, from March 2011 onwards insurers have to calculate economic capital (sufficient surplus to cover potential losses over a specified time). It involves a lot of actuarial calculations, and work has to start at least three months before next March. The insurers are sending their replies to our letter.”
As per IRDA regulations, every life and non-life insurer should have an appointed actuary. While life insurers should have a permanent official, non-life companies can have a part-timer.
Further, appointed actuaries are IRDA’s representatives in the insurance companies and cannot be hired or fired without the regulator’s consent.
Ten years back when the sector was opened up, there was a dearth of qualified actuaries in general and specially for the non-life sector.
There are 24 non-life insurers – six of them government owned, four non-life, one agriculture insurance company and one Export Credit Guarantee Corporation – in India.
IRDA is also considering to scrap the system of part-time appointed actuaries in non-life sector, Kannan said. “But we are not sure about the adequate supply of actuaries for the non-life sector,” he added.
Kannan agreed only four non-life insures have full-time appointed actuaries and others have part-timers, many of them over 70 years of age.
The Institute of Actuaries of India (IAI) – the professional body governing the actuarial profession – is frowning at IRDA for permitting non-life insurers to hire professionals over 70 years of age as appointed actuaries.
“There is sufficient supply of young actuaries for the non-life sector. The upper age limit for a person to be hired and appointed actuary as per regulations is 70 years and IRDA is granting exemptions to some actuaries,” IAI president Liyaquat Khan told IANS.
According to IAI, 87 of the 170 actuaries in India as on March 31, 2010, are in the age bracket of 26-45.