This article focuses on recent developments in the insurance sector, including recent promotions, investigations into front-running, and changes to Irdai guidelines related to insurers’ outsourcing activities. It also outlines recent changes to the Irdai’s guidelines on identifying a high-quality data provider. There are several other interesting stories in this piece, so read on to find out what’s going on. And remember, don’t forget to sign up for our free daily newsletter for the latest insurance business news.
Recent promotions in the insurance industry
While talent has been a top priority in the insurance industry for several years, the COVID-19 pandemic and other recent scandals have put an extra level of urgency on the subject. A McKinsey study shows that 40 percent of employees in the industry are considering changing jobs in the near future. The industry needs to transform its talent model to build new capabilities at scale and pace. It also needs to embrace new ways of working.
For example, Starr Insurance Company has promoted Conan Dolce to regional vice president, where he will be responsible for driving marketing campaigns and collaborating with the insurance company’s brokers and clients. Conan joined the company in April 2015 and has seventeen years of experience in the industry. He brings to his new role expertise in risk services, retail, healthcare, technology, and more. In addition to his new role, Andrew Murray has over thirty-three years of experience in insurance.
Recent investigations into alleged front-running
Major private insurers have begun investigations into alleged front-running, which involves employees buying stock or positions in currency markets based on information they know is not publicly available. The scandal at Axis MF has led to fears of employees buying positions in currency markets or stocks. Recent investigations into front-running in the insurance business are likely to extend beyond the Axis MF scandal. The SEC, however, is not yet addressing these allegations.
This investigation comes after the Securities and Exchange Board of India (SEBI) announced penalties against Citadel Securities, a Chicago-based market maker that received compensation for routing customer orders. This practice, called Payment for Order Flow (POF), does not allow the firms to execute the best execution for customers. In such cases, the firms involved will place trades with the customer, but not necessarily in the same direction as them.
Recent changes in Irdai guidelines on outsourcing activities by insurers
The Insurance Regulatory and Development Authority of India (IRDAI) has recently introduced regulations on insurer outsourcing. The regulations clearly define which areas of work should be handled by insurers in-house and which can be handed off to third-party service providers. Insurers must adhere to the guidelines to prevent negative systemic impact and protect policyholder interests. The new guidelines also stipulate a number of new requirements, which insurers should comply with.
Insurers must maintain adequate documentation supporting the effectiveness of their outsourcing arrangements. This documentation must support the expectations of the Regulations, such as ensuring arm’s length distance and pricing activities with group entities and related parties. It should also be readily available for audits and inspections by the Authority and Board. It should be preserved for at least five years after the termination of the outsourcing contract.
Irdai guidelines on identifying a high-quality data provider
The Irdai has recently released new guidelines for the insurance industry that recommend using a national database of impaneled hospitals. These databases should have standardized data elements such as package rates and codes to enable analysis and reporting. The report also calls for the adoption of data formats for policy-making and analysis. It also lays out a roadmap for paperless, codified, and electronic data exchange.