Insurance companies may have to publish annual reports: IRDA

Insurance Regulatory and Development Authority (IRDA) may soon ask insurance companies to publish their annual reports in newspapers in a move to bring in more transparency. The authority had recently asked for details of investments made by insurance companies in stock markets between September and November.

Officials at IRDA stated that the insurers will be forced to look at operational efficiencies and not just the top line growth once their accounts come under scrutiny. Section 20 of the Insurance Act provides for a person to ask for a copy of the valuation report of each life insurer on payment of specified fees. This report shows the details of the fund, the bonus rates and other vital data about a life insurer.

Currently only a few companies like Bajaj Allianz post their annual reports on the web sites, otherwise little is known about the investments made in stock markets by insurance firms. However some private sector insurers have already raised objection against this stating that it might take more than seven years for a new life insurer to break even. So, if a prospective policyholder sees that the company is making losses, they may not buy any product from it.