Insurance Regulatory and Development Authority

Ever since we moved towards de-tariff regime there is a natural compulsion on the part of non-life companies to adopt risk based pricing. Risk based pricing involves the availability of the strong data base and also various analysis regarding pricing, to measure the underwriting impact, testing the profitability of products etc. We have reached a situation where the role of appointed actuaries has to be enhanced significantly so that general insurers are in a position to cope with public demand for non-life products and at the same time ensure the availability of solvency on a continuous basis. Due importance must also be given for the profit to be generated by each product. Keeping in view all these requirements the following measures are proposed:

The Appointed Actuary must be given necessary infrastructure in the office of non-life insurer so that he can function effectively and lead the team members in the actuarial department.
The Appointed Actuary shall be invited for all the Board Meetings of the Non-life insurance company.
The Appointed Actuary has to certify that each product is financially viable.
The Appointed Actuary must help the insurer to ensure the availability of required solvency of the company at all points of time and wherever deficiency is noticed he / she must inform the Board for necessary action. In the event of no action / inadequate action, he / she has to keep the Regulator informed as enshrined in the Appointed Actuary Regulations.
The Appointed Actuary has to prepare the financial condition report of the non-life insurance company and in this context the Regulator will give necessary guidance very shortly. This Report is to comment from the financial year ending March 31, 2009.
The CEO of general insurance company must send a letter to the Authority on or before September 15, 2009 that necessary arrangements are in place for the Appointed Actuary to undertake the above responsibilities.