IRA bill withdrawal stalls private sector entry into health insurance

Friday, August 8 1997

IRA bill withdrawal stalls private sector entry into health insurance

PRESS TRUST OF INDIA

NEW DELHI, Aug 7: The withdrawal of Insurance Regulatory Authority (IRA) bill in the parliament on Wednesday has plugged the entry of private sector players in the health insurance sector.

Unless amendments to the GIC Act were carried out, which will be possible only after the passage of the IRA bill, private sector participants cannot enter the health business arena, VK Dhall, additional secretary (insurance), told newsmen here today.

In his budget speech finance minister, P Chidamabaram, had envisaged the entry of private sector through joint ventures with GIC and allowing selected Indian players in the health insurance sector.

Earlier, addressing the conference on insurance "tryst with destiny" organised by the Confederation of Indian Industry (CII), Dhall said the withdrawal of bill should be seen with the right perspective and sense of history.

Stating that there was no reason to be despondent, he said India has a vibrant deomacracy where various shades of political opinion existed.The government was always keen that the regulatory mechanism should be put in place before any opening up so that new players are guided in a professional way, he said.

This is necessary as hiccups in initial years of setting up would prove detrimental to the overall interest of the nation, Dhall said. Dhall said the role of IRA was well defined in the bill adding the mandate of the multi member autonomous authority would be to regulate and monitor players in the sector.

The state of the health insurance in the country is in a "rudimentary" stage, he said adding the needs of the customers are growing and to meet the expectations latest information technology and back up from insurance business should be deployed. India has massive plans for the infrastructure sector and in the next five years the infrastructure investment required would be to the order of 200 billion dollars.

This would throw up immense opportunities for the expansion and diversification of the insurance business, Dhall said.