Seasoned bureaucrat C S Rao on Tuesday took over as chairman of the Insurance Regulatory and Development Authority and spoke of the exciting potential in the insurance industry with a huge market waiting to be tapped.

Rao, a 1967 batch Indian Administrative Service officer, who has been appointed in the new post for a five-year term after his retirement last month, succeeds N Rangachary who demited office on Monday after guiding the regulatory body since its inception in 1996.

"Insurance is now a wonderfully expanding service sector with more and more players coming in and experimenting with new products. There is a huge market waiting to be tapped," Rao, who was the revenue secretary before taking up the new assignment, told PTI in Hyderabad.

Rao chose to be non-committal on the government's proposal to park the IRDA funds in the public account, saying, "It is too early to talk about it as I need to get a feel of the issues."

He, however, expressed confidence that the contentious issue would be resolved soon. His predecessor had strongly opposed the idea of IRDA parting with its funds on the ground that such a course would undermine financial independence of the regulator.

Rao, who had also served as expenditure secretary in the Union finance ministry, also ducked a question on the proposal to have a separate authority for pension funds management.

Rao said his job was to see that a level playing field was created and consumer interests protected.

"A very good foundation has already been laid and I have inherited a sound system. Only consolidation needs to be done," he said.