Mumbai: Govt likely to address concerns insurance industry and align the rights of surety bond issuers with those of other creditors under the Insolvency Code. Non-life insurers had previously stated that one of the challenges in issuing surety bond It was that the bankruptcy code does not recognize the rights of insurance companies at the same level as other financial creditors.
“We understand that insurance companies should resort to recovery at par with banks. This aspect has been taken up with the government and they have responded positively,” said TR Alamelu, member of the insurance regulator. irdaisaid.
Last year, IRDA allowed insurance companies to issue surety bonds which act like bank guarantees. Finance Minister Nirmala Sitharaman In his budget speech, he had said that government departments would accept surety bonds in their tenders instead of more expensive bank guarantees. Insurance companies had responded positively to the announcement, but said they did not have the option to convert the bank guarantee into a loan and initiate recovery proceedings.
Speaking at a seminar on Mitigation of Emerging Risks organized by the National Insurance Academy, Alamelu said that the trade credit insurance guidelines have been revamped and cover more institutions like NBFCs and factoring companies.
Alamelu encouraged insurers to use RBI’s account-aggregator platform to make it easier for policyholders to transfer insurance policies and port them to new providers. They can also use tools provided by the National Digital Health Mission to develop products for customers who have stored their data digitally and are willing to share it.
“We understand that insurance companies should resort to recovery at par with banks. This aspect has been taken up with the government and they have responded positively,” said TR Alamelu, member of the insurance regulator. irdaisaid.
Last year, IRDA allowed insurance companies to issue surety bonds which act like bank guarantees. Finance Minister Nirmala Sitharaman In his budget speech, he had said that government departments would accept surety bonds in their tenders instead of more expensive bank guarantees. Insurance companies had responded positively to the announcement, but said they did not have the option to convert the bank guarantee into a loan and initiate recovery proceedings.
Speaking at a seminar on Mitigation of Emerging Risks organized by the National Insurance Academy, Alamelu said that the trade credit insurance guidelines have been revamped and cover more institutions like NBFCs and factoring companies.
Alamelu encouraged insurers to use RBI’s account-aggregator platform to make it easier for policyholders to transfer insurance policies and port them to new providers. They can also use tools provided by the National Digital Health Mission to develop products for customers who have stored their data digitally and are willing to share it.