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IRDA taking precautions to prevent misappropriation of public funds by pension fund managers

February 19, 2009 The Insurance Regulatory Development Authority (IRDA) is taking all possible precautions to ensure that the pension fund managers do not misappropriate public contributions for availing of post-retirement pension benefits.

Announcing this at ASSOCHAM organized Conference on Pension and Retirement Planning, IRDA Member (Actuary), Dr. R Kannan also said that the regulatory authority will make disclosure norms so stringent that pension fund managers will have to come out quarterly balance sheet statement. This is being done to establish that pension fund manager do not resort to Satyam type of scam and misappropriate public contributions.

Mr. Kannan warned that regulator will have all powers to merge pension fund managing company with government owned company in case any scam brakes out and public money is misused.

According to Mr. Kannan, the insurance regulator will have to consistently show credit ratings attained by them so that the regulator has adequate information which fund manager is better and comes up to expectations of subscribers.

The insurance regulator will insist on higher credit rating of pension fund managing companies so that their credit worthiness falls on established practices of sound corporate governance norms. The Actuary also added that enough competition is created among all fund managers so that pension advantages to pension subscribers turned out to be best and public at large stands to gain.

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