Actuarial techniques now find practical application in the operation of a general insurance company. But there is lack of awareness and appreciation of this fact, even amongst the staff and officers of insurance companies, which calls for a change. This article discusses the role of the Appointed Actuary as per the regulations of IRDA and goes beyond to examine other areas in general insurance operation where the services of Actuaries can be utilized.

The Insurance Act, 1938, is the basic law that governs the transaction of insurance business in India. This Act has been amended from time to time to bring about the required changes in the insurance sector and push the agenda for the industry. The amendment made in 2000 resulted in the formation of the Insurance Regulatory and Development Authority (IRDA) and vested power with it to issue regulations from time to time to regulate the insurance market and to protect the policyholders' interest. This amendment also opened up the insurance market in India for private players. This meant a more proactive role for the regulator to ensure the overall health of the sector as also to maintain a strict vigil on the conduct of insurance companies. To further liberalize the market and to bring in some more positive changes, the act is going to be further amended. The draft bill is pending with the Parliament.

This latest amendment of 2000 brought in its wake for the first time the concept of appointed actuary in general insurance companies operating in India. Every general insurance company now is necessarily required to have an appointed actuary. The role of the actuary has been defined in the regulations issued by IRDA. While the appointed actuary will receive his remuneration from the company, he will also be reporting to IRDA directly on certain matters which are critical and may require immediate IRDA intervention.

Why has an actuary suddenly become so important in general insurance companies? Why was he not important earlier? What are the areas where his services are mandatory? What are the other areas where he can be of help and his services can be beneficial?

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