Detariffication has led to the financial weakening of all non-life insurers. With the stock market performing poorly, their financial problems have worsened. Greed for premium volumes, indulgence in poor corporate governance standards and unethical conduct in the past has piled on to make their financial agony even more acute. This article contends that the proposed amendments to the Insurance Act by the government cater to sectional interests and not to build a dynamic insurance market of the future.

Lack of historical data and a general unwillingness of insurers to analyze the current trends of claims' incidence and their causes for taking corrective underwriting measures have undermined the efforts of insurers to reverse the loss-making trends. Inevitably, this situation has led to the market getting increasingly unfair, uncompetitive and even self-destructive. There is a lack of sense of direction. No guidance from the General Insurance Council, through collective efforts of insurers has come forth till now. The non-life insurance industry stands fragmented, among its players, with the interests of individual players dominating the safety of the insurance system. The burden on the Insurance Regulatory and Development Authority (IRDA) has therefore increased.

The IRDA has three basic objectives on its agenda—One is to ensure the financial solvency of each insurer at all times; the second is to ensure the protection of policyholders' interest against the misuse or abuse of an insurer's enormous powers to deny or delay fulfillment of its contractual obligations, through a variety of legalized gimmicks; and the third to ensure that the competitive environment is one, which is fair to all the players. Each market watcher may have his or her own take on how far the regulatory mechanism and the authority has worked in the best interests of all the stakeholders; and whether the market developments are shaping up on the right lines. My view is that, unfortunately, the insurers are progressively getting financially weaker and weaker due to mindless competition, for the sake of gaining premium volumes at uneconomic rates.

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