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^mm ~r {d {d à ANNUAL REPORT 2016-17 INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA ANNUAL REPORT 2016-17 INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA Head Office 3rd Floor, Parishram Bhavan, Basheerbagh, Hyderabad - 500 004, INDIA Phone : +91-40-2338 1100 / 1300 Fax : +91-40-6682 3334 New Delhi Regional Office (NDRO) Mumbai Regional Office (MRO) Gate No.3, 1st Floor, Jeevan Tara Building Royal Insurance Building, Ground Floor Parliament Street, 12, J. Tata Road (Near Church gate) New Delhi - 110 001. INDIA Mumbai 400 020, INDIA Phone : +91-11-2344 4400 Phone : +91-22-2289 8600 Fax : +91-11-2374 7650 website:www.irdai.gov.in ANNUAL REPORT 2016-17 CONTENTS MISSION STATEMENT Members of the Authority as on 31st March, 2017 Senior Officers of IRDAI PART – I POLICIES AND PROGRAMMES Page No. I.1 General Economic Environment ................... 1 I.2 World Insurance Scenario ................... 4 I.3 Appraisal of Indian Insurance Market ................... 8 I.4 Review ................... 31 I.4.1 Protection of Interests of Policyholders ................... 31 I.4.2 Maintenance of Solvency Margins of Insurers ................... 36 I.4.3 Monitoring of Reinsurance ................... 36 I.4.4 Monitoring of Investments by the Insurers ................... 36 I.4.5 Health Insurance Business ................... 45 I.4.6 Business in the Rural and Social Sectors ................... 65 I.4.7 Financial Reporting and Actuarial Standards ................... 67 I.4.8 Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Programme ................... 67 I.4.9 Crop Insurance ................... 70 I.4.10 Micro Insurance ................... 71 I.4.11 Directions, Orders and Regulations issued by the Authority ................... 73 I.4.12 Right to Information Act, 2005 ................... 73 PART – II REVIEW OF WORKING AND OPERATIONS II.1 Regulation of Insurance and Reinsurance Companies ................... 77 II.2 Individual Agents associated with the Insurance Business, ................... 84 Channel-wise New Business Performance 85 II.3 Intermediaries Associated with the Insurance Business ................... 88 II.4 Professional Institutes connected with Insurance Education ................... 95 II.5 Litigations, Appeals and Court Pronouncements ................... 95 II.6 International Cooperation in Insurance ................... 95 II.7 Grievances ................... 101 II.8 Insurance Associations and Insurance Councils ................... 105 II.9 Insurance Ombudsmen ................... 107 v ANNUAL REPORT 2016-17 PART – III STATUTORY AND DEVELOPMENTAL FUNCTIONS OF THE AUTHORITY Page No. III.1 Issue to the applicant a certificate of registration, renew, modify, ................... 109 withdraw, suspend or cancel such registration III.2 Protection of the interests of policyholders in matters concerning ................... 110 assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance III.3 Specifying requisite qualifications, code of conduct and practical training ................... 113 for intermediaries or insurance intermediaries and agents III.4 Specifying the code of conduct for surveyors and loss assessors ................... 114 III.5 Promoting efficiency in the conduct of insurance business ................... 115 III.6 Promoting and regulating professional organisations connected with the ................... 117 insurance and reinsurance business III.7 Levying fees and other charges for carrying out the purposes of the Act ................... 118 III.8 Calling information from, undertaking inspection of, conducting ................... 118 enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business III.9 Specifying the form and manner in which books of accounts shall be ................... 119 maintained and statements of accounts shall be rendered by Insurers and other insurance intermediaries III.10 Regulating investment of funds by insurance companies ................... 119 III.11 Regulating maintenance of margin of solvency ................... 121 III.12 Adjudication of disputes between Insurers and Intermediaries or ................... 122 Insurance Intermediaries III.13 Specifying the percentage of premium income of the insurer to finance ................... 122 schemes for promoting and regulating professional organisations referred to in para ‘6’ III.14 Specifying the percentage of life insurance business and general ................... 122 insurance business to be undertaken by the insurers in the rural and social sectors vi ANNUAL REPORT 2016-17 PART – IV ORGANISATIONAL MATTERS Page No. IV.1 Organisation ................... 125 IV.2 Meetings of the Authority ................... 125 IV.3 Human Resources ................... 125 IV.4 Internal Committee for Women Employees ................... 126 IV.5 Promotion of Official Language ................... 126 IV.6 Research and Development ................... 128 IV.7 Status of Information Technology ................... 129 IV.8 Accounts ................... 131 IV.9 IRDAI Journal ................... 131 IV.10 IRDAI Office Building ................... 131 IV.11 Acknowledgements ................... 131 BOX ITEMS 1 Regulatory Initiatives to Increase Health Insurance Penetration ................... 46 2 Merger of the HDFC Ergo General Insurance Co. Ltd. With ................... 119 L&T General Insurance Co. Ltd. 3 Implementation of Ind AS ................... 120 TEXT TABLES I.1 Provisional estimates of National Income and Expenditures on GDP. ................... 1 I.2 Provisional Estimates of GVA at basic price by Economic Activity ................... 2 I.3 Financial Savings of Household sector ................... 3 I.4 Gross Savings ................... 3 I.5 Total Real Premium Growth Rate 2016 ................... 4 I.6 Region Wise Life and Non-Life Insurance Premium 2016 ................... 5 I.7 Insurance Penetration and Density in India ................... 7 I.8 Registered Insurers including Foreign Re-insurers’ branches / Lloyd’s India ................... 8 I.9 Premium Underwritten: Life Insurers ................... 9 I.10 Market Share: Life Insurers ................... 10 I.11 New Policies Issued: Life Insurers ................... 10 I.12 Paid-up Capital: Life Insurers ................... 11 I.13 Commission Expenses: Life Insurers ................... 12 I.14 Commission Expense Ratio: Life Insurers ................... 12 I.15 Operating Expenses: Life Insurers ................... 12 I.16 Operating Expenses Ratio: Life Insurers ................... 12 I.17 Dividends Paid by Life Insurers ................... 13 I.18 Individual Death Claims of Life Insurers 2016-17 ................... 14 vii ANNUAL REPORT 2016-17 Page No. I.19 Group Death Claims of Life Insurers 2016-17 ................... 14 I.20 Number of Life Offices ................... 16 I.21 Distribution of Offices of Life Insurers -No. of Life Offices ................... 16 I.22 Distribution of Offices of Life Insurers - Tier-wise ................... 16 I.23 Gross Direct Premium Income in India: General and Health Insurers ................... 18 I.24 Gross Direct Premium Income in India: General and Health Insurers-Insurer-wise ................... 19 I.25 Premium (Within India) Underwritten by General and Health Insurers Segment-wise ................... 20 I.26 Ratio of Outside India Premium to Total Premium ................... 20 I.27 Gross Direct Premium from Business Outside India ................... 21 I.28 Number of New Policies Issued: General Insurers ................... 21 I.29 Paid Up Capital: General, Health Insurers and Reinsurers ................... 22 I.30 Underwriting Experience: General and Health Insurers ................... 23 I.31 Gross Commission Expenses: General and Health Insurers ................... 23 I.32 Operating Expenses: General & Health Insurers ................... 24 I.33 Net Incurred Claims: General & Health Insurers ................... 24 I.34 Incurred Claims Ratio: General & Health Insurers ................... 25 I.35 Investment Income of General & Health Insurers ................... 25 I.36 Profit after Tax of General & Health Insurers ................... 26 I.37 Dividend Paid General, Health & Re- Insurers ................... 26 I.38 Number of Offices of General Insurers ................... 27 I.39 State/UT-wise Distribution of General Insurance offices as at 31.03.2017 ................... 27 I.40 Number of General Insurers’ Offices – Tier-wise as on 31.03.2017 ................... 27 I.41 State/UT-wise coverage of Districts by General Insurers ................... 28 I.42 Data for Calculation of Motor TP Obligations 2017-18 ................... 30 I.43 Activities undertaken and amount spent - Insurance Literacy & Consumer Awareness initatives of IRDAI ................... 35 I.44 Net Retentions (GIC Re) 2016 - 17 ................... 39 I.45 Members’ share in Indian Market Terrorism Risk Insurance Pool ................... 39 I.46 Members’ share in Indian Nuclear Insurance Pool ................... 40 I.47 Business Figures of the Re-Insurance Entities 2016-17 ................... 41 I.48 Net Retention of General Insurers as a percentage of ................... 42 Gross Direct Premium (Including Indian Re-insurers) I.49 Reinsurance placed by General and Health Insurers within & ................... 42 Outside India as a percentage of