The Institute of Chartered Accountants of India (ICAI) today launched a post qualification course, the Diploma in Insurance and Risk Management (DIRM), to enable accountancy professionals to play a larger role in the exopansion of the insurance sector in India following its opening up to private and foreign investment.

In his 'Virtual launch' of the course (video-recorded inaugural speech), the Chairman of the Insurance Regulatory and Development Authority (IRDA), N. Rangachary, sought to allay fears about the longevity of private sector players in the insurance industry. He pointed out that all the foreign partners of Indian private sector insurance companies commanded a minimum of 100 years of experience in the business, efficiency and innovative skills and were in India for the long-term. They were fully capable of meeting the needs of capital adequacy and insolvency margins and their liabilities to the insured. "There should not be any doubt" on this score, Mr. Rangachary said.

Commending the role played by chartered accountants in assistiing the IRDA in carrying out onsite and offsite inspections he said the professionals should explore opportunities in activities such as insurance agency broking, and assist companies in managing liabilities.

The President of the Institute R. Bupathy, said insurance companies in the country were likely to opt for BPO (business process outsourcing) to control the size of their organisations and this afforded an opportunity for CA professionals. He said ICAI members would have an interaction programme with the IRDA in Hyderabad on June 3.

G.K. Raman, Chairman, Royal Sundaram Alliance, said the likely de-tariffing of 'own damage' insurance in the case of motor vehicles, for which the industry had been pleading, and subsequent possible de-tariffing of more lines would meanthat accountancy professionals with domain knowledge of insurance services would be able to advise insurance companies in the pricing of products keeping in view the capital adequacy, insolvency margins and market potential. He expressed concern over the "creeping in of some old (namely, pre-nationalisation) practices" in the industry, like " rebating outside the books", and urged the IRDA to enforce a code of conduct for the industry.

The Member of the IRDA, T.A. Balasubramanian, said the life insurance segment of the industry was already working on evolving a self-regulatory code of conduct and the general insurance sector should follow the example. The authority would render necessary assistance for this purpose. He said the regulators in India had taken the leadin coming out with regulations for 'appointed actuaries'. The concept of 'economic capital' was becoming the 'best practice' for the insurance industry even in emerging markets and would be mandated by Basle - II norms by 2006, Mr. Balasubramanian added. The Chairman of the Insurance Committee of the ICAI, Gopalakrishnan, said the changing demographics in India with a larger percentage of aged population, increasing GDP and incomes, break-up of the joint family, working couples and consumer expectations regarding tailor-made products all made the insurance sector an area of opportunity for accountancy professionals.