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Two disturbing signals are emerging from the newly opened up insurance sector, which need to be firmly dealt with by the IRDA.

Western insurers are noted for withdrawing insurance cover from areas no sooner than a hurricane hits the area, not granting insurance to property in flood-prone areas and following post codes in risk assessment for motor insurance. No wonder, they have imported these `business ethics' while bringing their `expertise' to India. One can understand their charging a market premium for motor insurance, but the Government and the IRDA cannot allow such threats to be carried out. The renewal of licences of such insurers need to be considered in this light.

Private general insurers, perhaps, expect the State general insurers to take such unprofitable classes of business while they merrily tap the `creamy layer'. Second is the demand for private insurers to redefine rural and social sectors.

It may be recalled that there was a heated debate in Parliament on this issue and the Finance Minister had made categorical assurances on the floor of Parliament in this regard.

After an initial reluctance to prescribe norms, the IRDA had prescribed certain norms in the regulations. Even these norms are now sought to be diluted by private insurers even without a meaningful attempt on their part to begin entering, though slowly, the rural market and social sectors. There is hardly any justification for the IRDA to commission IIM, Bangalore to re-examine the issue.

S. Subramanyan

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