Insurance Sector Reform in India
2003-2007 || U.S. Agency for International Development
Deloitte was contracted to work with India's newly formed Insurance Regulatory and Development Authority (IRDA) to help them strengthen their ability to develop and regulate the insurance market in India. As a result of this collaboration, the IRDA's institutional capacity and supervisory capabilities were strengthened, which increased their ability to supervise insurers' compliance to laws and regulations, improved transparency, and enhanced mobilization and allocation of resources generated from insurance. A major component of the project addressed improving access to health care services for Indian citizens through private health insurance products. Deloitte provided knowledge and support to help guide the development of private health insurance options as well as products targeting vulnerable populations including the rural poor and the elderly. In addition, Deloitte assisted the IRDA to adopt a regulatory platform that enabled the establishment and entry of new stand-alone health insurance companies into the marketplace.
The Insurance Regulatory and Development Authority Act was passed in India in 1999, which allowed the introduction of private companies to participate in the insurance market in India and named the IRDA as the sole insurance regulatory body to oversee all insurance-related activity. The mandate of the IRDA was to both regulate the insurance industry, and also to help develop the market. Prior to the Act, insurance in India was a state monopoly. As a newly established entity with a daunting mandate, the IRDA sought USAID technical assistance to help build its institutional capacity to apply leading international practices for the newly created private insurance industry and its supervision. In addition, the IRDA needed to address deepening and broadening insurance penetration, particularly among those residing in India's rural areas and the poor. Both of these groups comprise a large percentage of the Indian population.
Deloitte provided a wide-range of technical assistance to the IRDA while supporting institution-building efforts of other stakeholders working within the insurance market in India. Specific activities included:
The productive collaboration under the USAID-funded project resulted in strengthened institutional capacity of the IRDA, with a special emphasis on equipping it to deal with changes in the insurance industry's competitive profile, institutional framework and professional landscape. The benefits of the project continue to be felt in India today, with ongoing internships in the United States to facilitate continued learning and information exchange for IRDA staff. In addition, the project contributed to significant changes in India's insurance industry, particularly with respect to the entry of several private health insurance companies that have helped make insurance coverage more accessible and better tailored to diverse consumer needs.
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