And not why the government has retained the decisive say in all matters on insurance business. Consider the following. All the government need do to ensure insurance liberalisation is to repeal the acts of insurance nationalisation and bring back the old Insurance Act. Overseeing conformity with regulations is the job of chartered accountants who also report to shareholders. But the IRA bill lays down regulations in detail.
Flexibility is ruled out.
All IRA will do is to issue licences, that is, keep out competitors, and operate a club. The new IRA bill has been created by the bureaucracy for the bureaucracy. The bill virtually prescribes how insurance companies should run their business, allows no flexibility in premium structure and leaves very little room for treasury management. So long as competition is held at bay, more insurers will not mean different perceptions on risk-taking or new thrusts in financial management. This is no reform.