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The man who insured the future of insurance
Freny Patel in Mumbai |
June 10, 2003
Known for his simple sartorial taste -- a spotless white shirt and white pants -- and the trademark tilak across his forehead, Insurance Regulatory and Development Authority chairman N Rangachary could be possibly be the most down-to-earth regulator in the financial system. The Irda chief retired on Monday.
The credit for privatising the Indian insurance industry goes to him even though he never claims that. He does not have to as the industry sings paeans for his achievements.
Ask the CEO of any insurance company about his impression about Rangachary, the answer will be: "There is no negativity in this man: What you see is what you get."
The industry sees him as being a straight forward man, who is very approachable. Says OM Kotak Mahindra Life Insurance CEO Shivaji Dam: "He listens. You can tell him you are not happy and he is prepared to change."
Rangachary has exercised his discretion to the maximum when it comes to the customer. Says senior officials at ICICI Prudential Life: "Customers today have better choice and are protected, thanks to the foundation laid down by Rangachary."
Rangachary was a man who stood his ground, not yielding to any ad-hoc demands and fancies of the government.
His only aim has been to promote insurance for the good of the society at large, even if that means inviting the wrath of corporate India.
Rangachary started his career as a junior officer in the income tax department and was elevated to the post of chairman, Central Board of Direct Taxes, before he took over the role as chairman of what was initially IRA (Insurance Regulatory Authority) in 1996. In 2001, he got a two-year extension as head of IRDA.
At IRDA, the going has not been easy. At the fag end of his tenure as chairman, Rangachary faced some severe pressure -- both from the North block as well as an agitated India Inc.
When the Centre decided to take control of the funds lying with the IRDA, Rangachary put forth strong arguments for the need of funds by the regulator for the development of the insurance sector. The centre, however, won the case.
When the IRDA decided to take the rod against insurance companies, allowing their clients to advance their risk covers in a bid to ward off the hike in service tax, some companies over-ruled the dictate.
Here too, the IRDA lost the battle. Now, that IRDA has decided to do away with the direct five per cent discount on premium allowed to the insured, the corporate world is agitated once again.
Once the insurance industry was privatised, the expectation was that LIC would lose 10 per cent market share over a period of five years.
Instead, the state insurer has lost about eight to 10 per cent within two years of privatisation.
This is, as Rangachary once said, even as the new kids on the block are learning to walk and compete with adults who are already well adapted to the market place. Indeed, he created a level playing field for all players without bias or favour.