Transcript FSAP Program

Financial Sector
Assessment Program
Implementation of Core Principles
25, 27 and 28
29th December 2010
G V Rao -Presentation
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What ICP coverage should mean?.
Possession of Authority/Implementation of
Principle. Resources/ Capacity- observance.
 Public consultation for transparency to make
new rules.
 Accountability for action needed.
 Assessing framework to indentify gaps in
consumer protection & market stability.
( To provide industry/consumer perspectives).
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ICP 25—Consumer Protection.
1. “ SA sets minimum requirements insurers & intermediaries dealing with
consumers.
2.“Strengthen consumer confidence in
market.
3.Treat consumers fairly—info’-wise.
4.Good claim resolution process for fairness.
5.Access to information/consumer
rights/obligations.
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Essential criteria & Evidence.
1. Are insurers/intermediaries dealing with
consumers with due skill, care, diligence?
2. Do insurers have policies & systems &
provide training to employees on these?
3. Requirements to seek info’ from
consumers. Are they outdated?
4. Norms for effective, fair, simple, accessible
& equitable claim process, need review?
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One view?
IRDA has legal framework to implement.
 IRDA to record procedures & accountability
to enable insurers & intermediaries to
achieve set requirements. Within?

Consumers to know what these are?
 How is that done now by each?

Consumer ignorance of protection-huge?
 IRDA- oversee insurers implement goals.
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Claim processing—change
proposed?
Claim two aspects—liability & quantum.
 Both are decided in one go & a long time.
 Determine liability first; arbitration helps.
 Empower customer to negotiate claim?
 No surveyors fined for breach of COC?
 Insurers now dictate on assessment prior
to accept liability of claim.
 Modify current claim policy condition.
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Suggestion on Licensed Surveyors.
1.
2.
3.
Like in TPA, Agency, have written
contracts between insurers & surveyors.
Surveyors should be sued for delays,
wrong & faulty discharge of functions &
duties.
Surveyors like brokers must have PI for
at least Rs 1 crore. So should TPAs—all
outsourced outfits.
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ICP 27- Frauds.
SA requires insurers & intermediaries take
measures to prevent, detect and remedy
insurance fraud.
To communicate with other SA to detect.
If there are specific legal provisions-fraud?
All in insurance chain are likely perpetrators.
Fraud results reputational, financial damage
and adds to social & economic costs.
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Essential Criteria.
SA has powers & resources combat fraud?
 Does legislation cover—definition fraud?
 High business integrity standards.
 SA requires insurers etc. devote resources.
 Counter-fraud training to staff.
 Co-operates with other SAs.
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Comments on Fraud.
Fraud—is it defined in Indian law?
 Vigilance covers only PSU internal staff.
 Private sector to have CVOs? GI Council?
 Surveyors & Brokers to have CVOs, as
they are organized as Associations.
 Insurers to have counter-fraud training?
 Deliberate breaches of current safety
legislation—is it fraud on insurers?
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AML, combating Terrorism-28.

SA requires, at least life insurers and
others offering investment products and
intermediaries to detect, prevent& report
ML & financing of terrorism—Financial
Action Task Force.
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Essential Criteria.
FATF recommendations.
 AML/CFT requirements.
 AML regulations.
 Sensitization of regulatory framework.
 Maintenance of data for 5 years.
 Insurers to develop procedures, systems &
training to detect AML/CFT.
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Systems, processes &
accountability?
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To be listed by each insurer and other
entities—and how these are supervised,
audited, and action taken for
implementation.
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Last slide.
Consumer protection needs fresh look.
 Insurer procedures must be self-contained.
 Insurers to play bigger role than now.
 GI council has to take on accountability.
 Surveyors and claim process need relook.
 Private players to have Vigilance outfits.
 IRDA to develop inspection expertise for
ICP implementation—work with others.
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