At the silver jubilee gathering of the insurance brokers’ association in Delhi last week, Insurance Regulatory and Development Authority of India (Irdai) Chairman Ajay Seth made a proposal that is hard to argue against: every policy should be traceable to the person who sold it, not merely to the bank or broking firm. A public register would hold this, so that when someone is sold an expensive endowment plan when a term cover would have done, the seller can be identified, and his record can follow him from one employer to the next. It sounds like the start of real accountability, and in a narrow sense it is.
To his credit, Seth did not stop at the register. In the same remarks, and in interviews since, he has spoken of tying the rewards of selling to the quality of advice rather than the volume of business, about making the unsuitable sale something an insurer is penalised for rather than paid for, and about a wider reform of the way these products are distributed. This is not a regulator who has forgotten that incentives exist; he has named both halves of the cure. The trouble is that the two halves are not equally likely to be implemented.
