Insurers may have to publish annual reports

Insurance companies may soon have to publish their annual reports in newspapers to boost transparency, the Economic Times reports. At present, only a few companies post their annual reports on their websites.

"We'll soon stipulate that insurers publish their annual reports," said Mr R Kannan, member-actuary with the IRDA. The insurers have already been asked to furnish details of investments made in stock markets between September and November.

 

Mr P S Prabhakar, a chartered accountant and an industry expert, says that better corporate governance is particularly required in the life insurance sector. He says that IRDA must stipulate that all domestic insurers publish their accounts at least after a certain fixed time. "Insurers should not be allowed to keep accounts under wraps in perpetuity," he said. "A policyholder should know if the insurance company has sufficient assets to pay off its liabilities."

 

But the proposal has run into resistance from some private-sector insurers. "Policyholders need not know about profit or loss or the assets and liabilities of an insurance company. They are not creditors or investors," said an official in a leading insurance company. 

"It takes more than seven years for a new life insurer to break even. So, if a prospective policyholder sees that the company is making losses, he or she may not buy any product from it. This goes against the spirit of liberalisation."