Concerns raised with IRDAI on outsourcing

GFIA has written to the Insurance Regulatory and Development Authority of India (IRDAI) to raise concerns about the revised draft of proposed regulations on the 'Outsourcing of Activities by Indian Insurers'.

 

GFIA warned against the establishment of a list of 'core activities' (re)insurers would be prohibited from outsourcing. GFIA suggested such a list may not be the ideal tool to provide legal certainty for the entities in scope of the proposed requirements and stressed that the activities determined in the current draft were not appropriate to ensure IRDAI's set objectives.

 

GFIA added that to limit activities, such as investment management function and claims handling, could have a detrimental impact on both insurers and their customers unnecessarily.

 

As an alternative, GFIA suggested that clear internal governance and control requirements for outsourcing activities were effective tools for the protection of policyholder interests.

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