Insurance, over the last five hundred years, has emerged as an effective risk management strategy that protects individuals and institutions from financial losses arising out of unforeseen contingencies said VP Venkaiah Naidu.
Funds pooled from many entities subscribing to the insurance programme are utilized to pay for the losses that some subscribers may incur.
Since there are many uncertainties and unforeseen catastrophic events in life like heavy crop losses, health emergencies and financial downturn, insurance has become a useful mechanism for coping with the losses and cushioning the impact. It has emerged as an important financial service and enterprise.
As the volumes of subscribers grow and the insurance grows into an industry, the need for a regulation arises. There is a need to prevent fraud and moral hazard. There is a need to protect the interests of the subscribers who are paying the premium. In a way, the regulator ensures that system is fair, transparent and accountable.
In the wake of globalization, there are new and emerging challenges and unprecedented uncertainties. Today, there is a greater need for insurance regulators. There is also a need for regulators to connect and collaborate because we are living in an increasingly interconnected and interdependent globe said Venkaiah Naidu.