SHRI SANTOSH BAGRODIA (CONTD.): was also suggested by my friend, that if you have only Government nominees in this Institute, then, even the IRDA has no right to have its own nominee. On behalf of IRDA, the nominees will be appointed by the Government! I can't understand all this. This sounds to be ridiculous because on the one hand, IRDA has got a nominee; on the other hand, the Government will appoint the nominee of IRDA! Then, there are three extra nominees. They will also be appointed by the Government. I do not understand what is the sanctity of appointing so many nominees by the Government. Why shouldn't a nominee be there from the Chartered Accountants Association itself? Why shouldn't a nominee be there from the Cost and Work Accountants Association itself? Why shouldn't a nominee be there from the Institute of Companies Secretaries? They should be allowed to nominate whosoever they want. Then, it would be more welcome. That would be a more representative association.

Sir, the Bill provides for a mechanism for regular upgrade and standardisation of the Actuary science in the wake of emerging requirements. Chapter VII of the Bill provides for the Quality Review Board and its functions. I compliment him. This kind of Review Board is necessary. I will appreciate if the hon. Minister, while replying to our queries, informs us how it is going to happen.

Sir, Chapter V provides for a redressal against the verdict of the Disciplinary Committee through an independent/expert Appellate Authority. The hon. Minister has just now mentioned that this independent/expert Appellate Authority will be the same Authority which is already in existence because there is not much of a difference. Like actuaries, let us have a vision also. There will be so much business. Does he have any plan to expand it? Otherwise, again, the cases will get accumulated and it will take years and years together to settle them. Since the present Appellate Authority itself is very busy in handling their own cases, it you add further cases from actuaries, it will only delay the cases further. I would like the hon. Minister to consider this aspect also.

Sir, as this IAI builds forward linkages among the global actuary institutions, I would appreciate if the IAI is also alive to our country's realities. A large section of our population does not have the insurance cover, as he has mentioned, the farm insurance. What kind of products do we have? We hardly have any product. We do need products or different kinds of products for different regions because India is a large country; the great India has got different claims, different kind of products, and different kinds of terrain. Do we have a variety of insurance covers for that? No. Then, what will happen? Despite the kind of insurance policies which we have today, even with a magnifying glass, you cannot see the rules and regulations. The result is, the poor farmers will never get their claims because the product itself will be a defective product. We must have much more faster actuaries so that we could get some products. Sir, I have seen that while we have been trying to extend effective insurance coverage to our farm sector, that is still ravaged, annually, by natural vagaries. Then, for tiny entrepreneurs, we do not have any facilities for meeting the insurance needs of the tiny entrepreneurs, the service sector and the IT sector, which are increasing day by day. (Contd. by TMV/2E)


SHRI SANTOSH BAGRODIA (CONTD.): Do we have any special coverage for them? Somebody told me how the IT sector developed so fast in Bangalore. It is very interesting. Sir, somebody mentioned that in Bangalore, in your own State, it developed because the Government itself did not know how to stop it. The Government is nowhere. It has no idea. The officers have no knowledge as to what is happening. By the time they gained some knowledge, the industry had developed so much that the Government could do nothing. But it is good that it has developed. It has increased employment opportunities. But do we have any insurance cover for these people? Some day it will collapse completely because of lack of proper insurance coverage. How fast can we get these special coverages for the urban poor? We don't have any insurance scheme for the urban poor.

Take medical insurance. We are all covered by CGHS as MPs. We are all covered by that scheme.

MR. DEPUTY CHAIRMAN: It is not insurance.

ָ֕ : Actuaries ִ

ӟ ֛פ : ִ ? ִ , ׻֋ ִ ֯ ָ ִ ־֮Դ ֲ֛և , ֻ Actuary ִ ֮ ֯ ֲ֛և ֠ ָ ֲ֛և .ߕ ֲ֛և , actuary ֟֋, ׻֋ ־ֿ

ֳ֯ן : כ

ӟ ֛פ : ֯ ֟ ִ֋ actuary ָ ֮ ָ 500 ֵ ֻ .ߕ ӿ ״ֻ֟ , ֻ֟ ? ״ֻ ߔ ֮ ֓ ӿ , ֻ , ׻֋ ־ֿ  .ߕ כ, ־ֻ ָٛ י̮ ӿ ָ ? ָ ӿ ָ , ׌ ? ֟ , ֕ ָ ֙ ױ ֵօ ָ ָ߲ ԓָ , ׸ֵ֛ ־֮Դ ָ , government employee , ָ ߴָ և ֕߾ Ӭ ָ ׸֓ Ùߙ ֵ, ָ ׸ֵ֛ , .... ֻ ֵ ï֙ ꅠ ֵ , ױ ֛, ָ֮ ֟ ײ֮ ׻֋ .... ָ כ , .... ָ և ï֙ ָ ־֮Դ ï֙ ָ ߙ ־ã , כ כ Ùߙ , ־ã ָ enlightened , ־֮Դ ׸ֵ֛ ָ , ֤ؕ ָ ו֮ , ֕ ֲ ߴָ և ӿ ׾֬ ״ֻ , ׻֋ we have to have some kind of medical cover which is acceptable to every citizen in the country. That is possible only if the actuaries give a proper product and that product is made popular.

ֳ֯ן : ֮ ׸ևӛ ֮ ֻ ֯ ֌ , ֌ ָ ֮ ֻ

ӟ ֛פ : ֯ ֟ ו֋ ָ և ֮ , ״֮֙ ֟

ֳ֯ן : ָ ֯ ֟ , ָ ï ״֮֙

ӟ ֛פ : , ״֮֙ ֟

Sir, I raise this particular issue of medical insurance because I am really concerned with the ordinary citizens of this country. I would like to know whether they have got enough medical insurance cover or not.

(Contd. by VK/2F)


SHRI SANTOSH BAGRODIA (CONTD): Sir, without insurance cover, it will be impossible for them to be treated properly in any hospital in the country. It is for this reason it has become very important, very imperative that we need a good medical insurance cover for this purpose for the ordinary citizens. Now I come to clause 9 -- Certificate of Practice. The Bill specifies that the Certificate of Practice could be obtained only after fulfilling the qualifications as prescribed by the Institute. The Ministry of Finance had agreed to incorporate such specifications. I hope the hon. Minister has incorporated it. The last point which I would like to mention is about penalties. The penalty is very low. It should be increased because it is a very serious matter. Actuary is a very serious job. For intentional mischief by any actuary, even for the first crime, there should be a provision for some kind of imprisonment. Unless it is done, there will be no deterrent. Although I have a lot of things to mention, I am sure my other friends and colleagues will cover all the points. Sir, as ordered by you, with great honour, I think you for giving me this opportunity to speak. I once again compliment the hon. Minister. With these words, I support the Bill. Thank you. (Ends)

MR. DEPUTY CHAIRMAN: Shri Rahul Bajaj. It is your maiden speech.

SHRI RAHUL BAJAJ (MAHARASHTRA): Sir, this is not my maiden speech. This is just a comment on what I have heard today. I am still waiting for an opportunity for my maiden speech. I must first put on record that I am the Chairman of two insurance companies, i.e. the Bajaj Allianz Life Insurance Company and the Bajaj Allianz General Insurance Company in each of which 74 per cent of the equity is held by the Bajaj Auto, of which also I am the Chairman. I have no personal interest in this matter and what I am saying has nothing to do with benefiting my company.

MR. DEPUTY CHAIRMAN: This is called disclosure of interests under the Ethics Committee.

SHRI RAHUL BAJAJ: Absolutely. I would like to make three-four points not so much on the Bill which I support fully, but on what I have heard from Shri Ahuluwalia, who has done a great deal of study and Shri Santosh Bagrodia. This is a highly specialised profession. To become an actuary, it requires years and tremendous hard work and experience. That is amongst the reason, Santoshji, why we have such a few actuaries in the country. Secondly, the total number of actuaries you need in the country, highly qualified actuaries, is not all that large. It is not like the Chartered Accountants, or lawyers, or doctors or engineers or Cost Accountants which you need in lakhs. Here the requirement is limited. Thirdly, as was mentioned rightly by Shri Ahluwaliaji, till five years ago, this was purely a public sector field. The LIC gave life policies and the GIC had four subsidiaries which gave general polices. I am very happy that they continue to be in the public sector. They should continue to be in the public sector so that the private sector does not get a free run. On the other hand, points have been made about the Actuaries and insurance. They are two separate issues because the private sector has come up with about 22-23 companies, both life insurance and general insurance companies. There is a tremendous shortage. We can't get properly qualified actuaries. They have to be certified and authorised by IRBA. We need more actuaries. If you have some extra actuaries, maybe, they will go abroad. I am not too much in favour of that, but they can get jobs outside. Actuaries are needed all over the world. Many comments were made about insurance. ֵ֤ ӛ , ֛ ָ ֜ ֋ ״ֻ, ָ ߕ , ״ֻ ֵօ It is in the small print. Briefly, the answer there, Sir, is competition. If you don't have competition, whether it is public sector or private sector, it is bad. I may say so -- I am from the private sector -- that the monopoly of private sector, I believe, is worse than the monopoly of the public sector.(Contd. by 2G)


SHRI RAHUL BAJAJ (contd.): At least in the public sector, they share with a large number of people. But monopoly is bad. It is competition which will prevent all these mischiefs, that is, if there are mischiefs, because nobody will buy policies from a company, if it does not pay the claims, which are justified, in time. But that has nothing to do with the actuaries. Mr. Ahluwalia rightly said, "You need data." You need trained actuary. But you also need data. If you don't have the data, then, the actuary can't do much. But if you have the data and no trained actuary, then, again, you are stuck. So, you need both data and actuary to make the right policy, to make the right, what you call 'products', more and more products, to take care of the poor, tiny industry, etc. But premium will be charged. That does not take care of the poor. The actuary does not take care of the poor. He only gives you a product and tells you how much premium to charge. Somebody has to pay that premium. That is another story by itself. Whether it is the Pension Regulatory Authority Bill or the Insurance Bill, whether the Government pays that, whether the private sector pays that, or, whether the person himself pays that, that is another issue. As for the poor man, who came for help, for treatment of his cancer, he cannot actually solve his problem. He can give a product. But somebody will have to pay his premium. I would conclude by only saying, "Yes; competition is very much required." I might also say, though this has nothing to do with the Actuaries Bill, as a person in the insurance industry, I support what I have read in the Press that the Government desires to increase the foreign equity from 26 per cent to 49 per cent. Let me also put it on record that I would be against it if the Government or anybody else decides to take the foreign equity to more than 49 per cent. Thank you, Sir. (Ends)

MR. DEPUTY CHAIRMAN: Shri N. Jothi. Not here. Dr. Abhishek Manu Singhvi.

DR. ABHISHEK MANU SINGHVI (RAJASTHAN): Mr. Chairman, Sir, I rise to support the Bill. I heard the previous speakers with attention and I agree with most of what they said. In particular, I was most impressed by Mr. Ahluwalia's comments which showed very deep knowledge of the inner working of the insurance sector. I do not know whether he has been an aggrieved customer, an aggrieved claimant or otherwise has worked in the insurance sector. But it obviously showed that he had the nitty-gritty knowledge of the insurance sector. Sir, we are not discussing insurance in general. We are discussing a very specialised area, the Actuaries Bill. Actuary, actually, is so specialised that I am reminded of what was said when the word 'Ombudsman' came in the early 60's in the dictionary of the Parliament of India. The word 'Ombudsman' was similarly a very unique word, and the question was put as to which zoo did this animal belong. I think that can actually be said for the word 'actuary' as well. I am happy to note that in the Hindi version, we have partly Indianised it by using the word 'Bimankank', and that is a very interesting word; I am not so sure whether any of us would agree with it.

Before I come to four specific suggestions, I wanted to say one preliminary thing which I hope the Minister and the Government will, generally, take into account. The real advantage, the real pioneering step and effect of this Bill would be if we are able to train and create a very broad base school of professionals in the actuaries field. We, in India, lack that; whether we get them from outside or whether we have them in India, that is different. And, as Mr. Bajaj said, although large numbers are not required, but, still a much larger number than today is required. And, if we expect our insurance sector to grow with leaps and bounds, -- I say this not only of life insurance, but also of several other areas of insurance -- then, the underpinningor the foundation for that must be a very broad pool of actuaries who are touching every specialised sub-field of insurance. Therefore, the real merit, the real relevance of this Bill, remains not in the Bill itself but in what manner we actualise it and operationalise it; what amount of education we can impart in the top institutes in India, under the auspices of the institute that we are creating under this Bill, and how soon and how fast we can create professionals who are comprehensively trained.

Sir, for the consideration of the hon. Minister, I have three or four quick and very specific suggestions on the Actuaries Bill in particular.

(Continued by 2H)


DR. ABHISHEK MANU SINGHVI (CONTD.): One, Sir, is about the qualifications. Now, since we all agree that Actuaries are a highly specialised sub-category of professionals, probably, more specialised than any other professional, we should consider introducing a provision, the absence of which we have lamented in several other professional Acts. We have lamented the absence of refresher courses and continuing education, for example, as a condition of renewal of licence of doctors, of lawyers and of Chartered Accountants. In several other jurisdictions, it is common that a professional who once qualified, and the difference between a profession and a business is that you are supposed to have an element of learning in a profession, it is the accumulated aggregate of learning which distinguishes a professional from business. Now, that learning, once done, and once you become a professional is subject to no renewal clause, that your certificate every five years or ten years requires some amount of renewal, subject to a minimum quantum of continuing education, or, what is also called is refresher courses. Pilots, for example, have to have it. But, of course, there are several other areas, and, I think, in the actuarial field, in particular, more than the other professionals. It is something which we can consider providing in the statute itself. We have found that although other professional fields have talked about it, once the Act has been passed in the legal field, in the medical field, in the Chartered Accountant, nobody has subsequently bothered to then provide by stipulation that you cannot get your professional status renewed unless you show a minimum quantum of continuing education every 'x' years, be it five years, seven years or ten years. I think, that will also be consistent with the highly specialisation of the job, it will lend a reassurance to the public and it will be generally in the public interest, apart from starting a new trend which, hopefully, will also be accommodated for other professional fields.

Sir, the second specific suggestion for the hon. Minister and for this august House to consider is, that we have, I notice in this Bill a provision which either has the relatively mild consequence of reprimand or it has the brahmashtra of the death penalty, namely, removal. So, you can either reprimand or you can remove. Removal, Sir, as we know, is the ultimate death penalty and it is, therefore, because of the brahmashtra nature of the penalty, relatively infrequently used, very, very rarely used, in fact. Reprimand, for many cases, may not be enough. What I am suggesting, Sir, is that one must consider a graded hierarchy of penalties in between because for all professional fields, and in particular for Actuaries, we need to reinforce public assurance, public faith and public trust in these bodies, and, for that, if we have, for example, we can consider several variants, whether it is suspension for a minimum period of time, whether it is something beyond reprimand in terms of a temporary suspension of licence for a few months or a few years, and less than removal, it would be in the public interest because, I think, it is most important to connect with the average public who thinks that when a professional becomes errant, he deserves to be comprehensively dealt with always by his peers, but the peers must have a graded hierarchy of powers, and not merely the minimum and the maximum with nothing in between.

Sir, the third suggestion is in the context of the appellate body. There is, as we have noticed in the various clauses, clauses 32 and 37, in particular, an appellate body is proposed. I only wanted to make a small suggestion that when you have an appellate body like this, and you have prior to the appellate body a disciplinary committee, the basic object is that peers decide the errors, if any, of peers. The idea is to minimise outside interference because in law, in medicine, in Chartered Accountancy and in other professional fields it is assumed, may be rightly, may be wrongly, we are not passing a valued judgement on that, that peer evaluation, peer disciplinary action, peer punishment is what is required, which, I think, is a salutary principle. Now, if that be so, Sir, a normal provision which is normally found in all such enactments which provides for an appellate authority and an appeal is that civil court's jurisdiction is barred, that is a parallel provision, it is a reinforcing provision, it is a subsidiary provision which reinforces the main sentiment and the main spirit. As far as I can see, that is missing in the present Bill, and, I think, that would reinforce the basic object that you have a two level peer disciplinary body, first, composed of the disciplinary committee and at the second level of an appellate body.

Sir, lastly, I would like to say about a point which my friend, Mr. Bagrodia has already made, but I want to expand on it, because perhaps, we have not realised the importance of that point. The point he made rightly was that it is not quite right to have, as is provided in clause 32 for the same existing appellate body, which we have today, for Chartered Accountants to be the appellate body for considering disciplinary appeals for the Actuaries. (Contd. by kgg/ 2j)


DR. ABHISHEK MANU SINGHVI (contd.): That is what is provided in the Bill. I have some practical experience from another area of profession where, in actual fact, we find that the appellate system of the Chartered Accountants which, of course, includes the Cost Accountants and several other professionals falling within the ICWA fold, is so clogged, is so crowded, is so overworked by numbers that the actual turn of decision on appeals comes many months and years after and there are cases ten years having elapsed before a decision. The point is not the time factor alone. The point is, you are trying to re-inforce public trust, public confidence in these institutions and professionals and the public should not feel that if there is a legitimate or any complaint, it is not decided either way by dismissal or allowing for years on end. There, I find that you are adding Actuaries to it. You are expecting that Actuaries will start increasing in numbers over the next few years, you are expecting rightly an explosion in the insurance sector. If that be so, the already clogged wheels and the already clogged inner workings of the appellate body for the Chartered Accountants will be ever slow to move for Actuaries. In fact, I find it a little inconsistent and anomalous that in that same clause 32 of the Bill, what they have proposed is that you have the existing disciplinary body, appellate body, in which you add 2 actuary members as members.

Now, perhaps, it is not being realised that those members would be sitting idle as far as the large number of Chartered Accountant cases are concerned because Actuaries are not supposed to deal with Chartered Accountants' disciplinary actions already going on, whereas the Chartered Accountants would be sitting idle so far as the Actuaries' matters are concerned even when they come for the disciplinary body.

So, Sir, I think, there is some mismatch there. A very simple change can be, make this body into a separate body. After all, you are setting up a new institute. If you are setting up a new body, if you are giving a new focus to a new segment of professionals, if you are trying to give a fillip to insurance, then, it follows and the spirit is consistent with providing for a separate appellate body to give it the requisite status to impart the requisite confidence to it.

Sir, I, therefore, suggest these for the kind consideration of the Minister and rise in support of the Bill, generally. Thank you, Sir.


SHRI EKANATH K. THAKUR (MAHARASHTRA): Thank you, Sir, I rise in support of the Bill and would like to make a few suggestions. Sir, probably, I am the only person in this House to speak on this subject, who has been considered not-insurable for the last about 36 years by the LIC, because I happen to be a patient of squamous carcinoma, the squamous cancer.

Actuary science has been practiced for many, many decades now, but there is an analysis which is so watertight that quite a few like me have been considered un-insurable. I had the privilege to be associated with the LIC of India, the Officers' Federation and I was also the President of All India GIC Officers' Federation of all the combined four entities, and, therefore, I happen to know individually Actuaries and the Actuary practice.


Sir, I do know that the Actuary science is not as tough as rocket science but, all said and done, it remains to be a science which is obtuse, inscrutable, aghast to many others who observe it. It is a science where we try to calculate the present effect of a future contingent event. (Contd. by kls/2k)


SHRI EKANATHA K. THAKUR (CONTD): It is a science where we do risk modelling based on our higher mathematics; it is a science in which also we do finance modelling, it is a science which helps in asset-liability management to the insurance companies. Sir, therefore, it is a very, very important science and as the new Member who is the Chairman of the Companies has mentioned that actuaries do not number in thousands. Today I believe we have about 1,47,000 Chartered Accountants in India; actuaries are two to three hundred in number and about 100 of the, a was mentioned by someone, are outside India. Sir, let me tell you that when a group becomes smaller and smaller and it controls assets which run into lakhs of rupees, as in the case of the LIC, that group is also subject to manipulation. I must mention here that in the LIC of India during '1970s and '1980s there were two groups of actuaries, and one group of actuary headed by one Mr. Vishwanathan, who is no longer in this world, and in his actual sciences stood first with many other actuaries, used to insist that the life fund of the LIC of India has not been properly calculated. He was also ostracised by his colleagues who owed their loyalty to the establishment. So, I only want to highlight that there is a great deal of power because of the intricacies of the actual science that rests in an actuaries. If actuaries are not overseen properly by the IRDA or such other agencies, then it is likely that the interests of those who ensure, maybe with the public sector companies of the private sector companies, can be greatly jeopardised. Sir, I would like to mention one or two more facts and take leave. It is because of this reason that just as even properly educated actuaries can defer on actual calculations which are so high, improperly educated quacks who claim to be actuaries can do tremendous amount of damage and because of the shortage there is a possibility that such knowledge and such qualification can be claimed by some who could cause incalculable damage to the nation and to the companies. Therefore, the punishment that has been provided under clause 37 -- The Penalty -- is, in my opinion, very mild because penalty of one year or fine of one lakh rupees is hardly a compensation for the kind of untold damage that a person who fraudulently claims to be an actuary and inflict on a company. I wish the Minister would look into this. Sir, while on the subject of actuaries, many issues have been raised and my colleagues on the treasury benches have also raised the issue of a very important element of insurance, namely, farm insurance. Sir, right now, in my State and you know in all the States of India during the last about 6 to 8 years, there has been a spate of suicides with which this whole nation and the entire polity is shaken. As I mentioned some time ago, that constitutes the greatest stigma on our polity, on our democracy, on the functioning of this great House. Therefore, one of the remedies to this uncertainty of incomes of farmer lies in providing farm insurance. Sir, in USA there is group insurance and individual insurance under which every farmer's yields are ensured and his income is insured.

(Contd by 2L)


SHRI EKANATH K. THAKUR (CONTD.): If there is a ten-hectare piece of land, then what would be the yield? That yield is also assured and, by way of a certain amount as a price of that yield, even the income, is assured. This nation has, over a period of time, to move to a situation where we are in a position to give these guarantees to our farmers and the nation must be in a position to give guarantees because the input cost of agriculture has tremendously increased. Agriculture in small, small plots, pocket-lands, is becoming uneconomic and that is the main reason for which these suicides have been taking place. Therefore, just as there is Universal Service Obligation Fund in the telecom sector, there must be a Farm Insurance Obligation Fund in the insurance sector. Sir, the Government of India, if it is serious about farming, about the agricultural sector, just as it has thought of a Universal Service Obligation Fund for the telephone sector, similarly, it must think of a Universal Farm Insurance Fund which has to be collected from the public sector companies and also private sector companies such as those of our respected Shri Bajaj. And then, from out of those collections, we have to subsidise farm insurance. Farm insurance is not going to be economic, as you know, and, therefore, from the Universal Service Obligation Fund, the farm insurance has to be subsidised. So, through your good self and through the Minister, I would urge upon -- because we are thinking of the Actuary science, we are thinking of the insurance industry -- and I would definitely request that such a Farm Insurance Obligation Fund is created from out of the profits of all the insurance companies -- the life insurance and general insurance companies -- and insurance is provided to our farmers. Sir, I would also draw your attention to Clause 50. Clause 50 is a dull, dreary subject, but this has entertained me quite a lot and I was laughing while reading this section. Clause 51 (1) says, "Where an Actuary in practice or a firm of such Actuaries has more than one office within or outside India, each one of such offices shall be in the separate charge of a fellow member of the Institute:" This a very well thought out section. There is such a shortage of Actuaries, as respected Shri Bajaj has mentioned. There is a great demand for them. And if one Actuary is setting up some ten, fifteen, twenty offices, it is going to be difficult for him to run those offices and to provide expertise from those offices. Therefore, if any such person who has an ambition to be an Actuar entrepreneur and once you start setting up ten or twenty offices, then in each one of those offices he must see the presence of one Actuary at all times. But, Sir, the same section says, under the proviso, "provided that the Council may in suitable cases exempt any Actuary in practice or firm of such Actuaries from the operation of this sub-section." Sir, you laid down a clause on the first and then, say that every office should be managed by an Actuary and then you say, the council may examine in suitable cases. Now, how will the cases become suitable? I would like to be enlightened on this and would like to know from the Minister what are the means and methodologies and modus operandi by which an unsuitable case will become a suitable case. (Contd. by NBR/2M)


SHRI EKNATH K. THAKUR (CONTD.): Therefore 'in suitable cases' it is not compulsory. And, if it is not compulsory, why this Clause 51? Why after Clause 51(1) you make a proviso and say that the Council may in suitable cases exempt any Actuary. Sir, suitable will mean suitcases, not suitable cases. It would mean suitcases. You carry suitcases; your case becomes a suitable case. Therefore, Sir, this provision, that is proposed to be enacted today, makes a mockery of this Clause. So, I would invite your kind attention to this and request the hon. Minister that this provision makes a mockery of the Clause. Therefore, this provision has to be deleted. Thank you. (Ends)

SHRI PAWAN KUMAR BANSAL: Sir, I thank all the hon. Members who have participated in this discussion and have made many valuable suggestions to the Government regarding the working of the Bill.

As it has been universally acknowledged, the role of Actuaries in the days to come has to expand tremendously with the expansion of the economic activities, particularly those relating to the insurance sector. For that precise reason, the definition of the term 'Actuary', included in the Act, takes note of the various forms of activities, the various forms of advices or the calculations which an Actuary may be called upon to render or make.

Sir, the insurance penetration into the country is only 3.5 per cent. We all do acknowledge the need for expanding the insurance services and taking it right up to the remotest corners of the country and, for all that, I would like to say, at the moment, the Government is conscious of this fact. The Government wants all the vulnerable sections of the society to be covered by various affordable insurance schemes. And, I would thank all the hon. Members for expressing their concern about this important sector. So far, a highly skilled profession as that of the Actuaries, there is no denying the fact that the quality of training has to be excellent. We have got to ensure that on the people, who enter this profession, lie a vast responsibility on their shoulder to device products, modulate products, to advice their clients and also the corporate management about the various products that have to be brought into the market to suit different sections of the society. The education and training that has to be imparted to them is to be of high standard. But, for that, as in the case of other professions, the Government feels that it has to be left to the Institute as such. In this context, I would like to read out to you, briefly, the provisions of Clause 5 of the Bill, which says, "The objects of the Institute shall be to-- (a) promote, uphold and develop the standards of professional education, training, knowledge, practice and conduct amongst Actuaries; (b) promote the status of the Actuarial profession; (c) regulate the practice by the members of the profession of Actuary; (d) promote, in the public interest, knowledge and research in all matters relevant to actuarial science and its application; and (e) do all such other things as may be incidental or conducive to the above objects or any of them." (CONTD. BY USY "2N")


SHRI PAWAN KUMAR BANSAL (CONTD.): Sir, an opinion was expressed, and rightly so, about the need of continuing education, about the need to ensure that the knowledge acquired yesterday does not become obsolete tomorrow, you have to got ensure that that there is some mechanism by which the Actuaries keep refreshing their knowledge and remain up to date in their profession. For that, again, though there have been two viewpoints expressed -- one, that the role that the Government assumes for itself is rather on the excessive; and, the other that the Government really does not have to do anything with the various activities -- the Government feels that its role has to be that of a catalyst, of that of a facilitator and to lay down certain things, and, then, leave to the concerned professional bodies to further pursue. In this context, Sir, I would like to refer to provision that we have in the Bill about the 'Establishment of the Quality Review Board'. It has been dealt with under clause 44. It says, "The Central Government shall, by notification, constitute a Quality Review Board consisting of a Chairperson and not more than four Members:

Provided that in the case the Board is constituted with two Members, one each shall be nominated by the Board and the Central Government, respectively."

Clause 45 deals with the functions of Board. It says, "The Board shall perform the following functions, namely: --

(a)    to fix standards for the services provided by the members of the Institute;

(b)   to review the quality of services provided by the members of the Institute including actuarial audit services; and

(c)    to guide the members of the Institute to improve the quality of services and adherence to the various statutory and other regulatory requirements."

So, once the Quality Review Board lays down the standards, it would become imperative for any actuarian profession to really update his knowledge always. In a competitive world, he has got to do it for a sheer survival; otherwise others would overtake. Therefore, there is no occasion for any sort of misgiving or doubt on that that the profession, perhaps, might not throw up as qualified Actuaries as would be needed in the days to come.

Sir, there was a reference to the composition of the Council of the Institute. I would like to, again, just briefly refer to the provisions, that is, clause 12( 2), which deals with the composition of Council of Institute. It says, "The Council shall be composed of the following persons, namely: (a) a minimum of nine and not more than twelve persons from amongst fellow members to be elected by the fellow and the associate members of the Institute in such manners as may be prescribed;...." Up to nine, Sir. And, so far as the number of nominated members is concerned, one will be nominated by the Government from amongst the members of the Insurance Regulatory and Development Authority; and, two from amongst the host of qualifications which have been given here, consisting persons from various associated experts in various fields. A question has been raised that why the Government should nominate a member from the IRDA, and why it should not be left to the IRDA only to send their own nominee. This question was discussed even in the Standing Committee. I would, with all the humility, like to submit to the hon. House that whenever the Government takes upon itself the responsibility of nominating any person or anybody from amongst a particular category, it is always the endeavour of the Government to ensure that that it carries out some sort of consultation with that particular group. And, I can assure the House that in prescribing the regulations to be framed, care would be taken of that. But, if it were to be provided in the Act itself that the IRDA has to send one representative, one could still understand, but though that could also become a rigid provision in the days to come. It could be time-consuming; it could have taken longer time. But when we have many other fields, like those of education, insurance, finance, law, only to have to be picked up. (Contd. by 2o -- VP)


SHRI PAWAN KUMAR BANSAL (CONTD.): The number of fields that we have mentioned is quite a few. To whom would one leave that? Therefore, the Government, rightly, has to take that responsibility upon itself to nominate two members who have excelled in any of those given fields. I again urge, Sir, that the hon. Members need not really entertain any misgiving, any doubt about that. The Government is duty bound to ensure that the best possible people that it can find would be made the members of the Institute to run the council in that fashion.

Sir, there was a point made about a single appellate authority for the Chartered Accountants as also for the acturaries as is being now provided by this Bill. Sir, in this context I would again like to reiterate what I had briefly mentioned earlier that this is a new Bill. It is for the first time that a statutory institute is being provided for to regulate and to deal with the profession of the actuaries. Therefore, we rightly feel, I would say with all humility in this regard that when you have an Appellate Authority; that appellate authority for this purpose would not be just the same that you have for others. I am grateful to Shri Abhishek Singhvi that he has drawn the distinction between the two. The Appellate Authority for the purposes of actuaries would be presided over by a person who has been a judge of a high court and who is nominated as the Chairperson of the Appellate Authority. The Chairperson would be the same for all the Appellate Authorities. But the other members under clause (b) would change. Why is it so? That was the question which was raised. Sir, earlier, before the recent amendment to the Chartered Accountants Act, the Appellate Authority in the case of Chartered Accountants was the High Court. It was not a statutory Appellate Authority as such. Since an amendment has been made as recently as in last session only, Sir, there is, practically, no work with the Appellate Authority at the moment. If we were to set up four different appellate authorities, say, one for the Chartered Accountants, one for the Company Secretaries, one for the Cost and Works Accountants and one for the Actuaries, with the task that it entails, it would be a wasteful expenditure. And our hon. Members often raised their voices in the House to say that the Government must cut wasteful expenditure. I can assure you, Sir, that since this is a new provision, as the work picks up, the Government would have to come before the House, and the House in its wisdom would then guide the Government to adopt a particular course. Sir, even when there is no work, we agree that there is a need to make a provision. It is not that we know that there would be work in the days to come, but still we are making one, and then there will be a backlog of cases. That is not foreseen at the moment. Sir, the number of actuaries, as I said in the beginning, is only 203 in the country at the moment. Though this number is expected to rise over the years, the projections are that there are about 4000 students now who have registered themselves for pursuing the course in the actuaries science, and including them and a few others like associates and affiliates, the total number, at the moment, is about 4300 and more. But it is expected that this number would be, at least, 10,000 by the year 2010 and 15,000 by the year 2015. When we find that there is need for a separate authority, one would certainly consider that matter. But, today, I think, it would be prudent to have only one and only one Appellate Authority for this purpose because all these Acts are, one could say, quite similar and in pari materia to each other. Only when there is necessity for some change, a change has been incorporated, but, otherwise, the Bills dealing with various professions are almost on the similar lines. That was precisely one of the reasons why it was felt that after the Chartered Accountants Act is amended, only then, this Act should be brought to the House. That is how this was further delayed for some time because first we wanted to amend the Chartered Accountants Act, after that was done, only then, this Bill was brought about.

An apprehension was expressed that there are a large number of students, but lesser number of actuaries. So, are there any dropouts?

(Continuted by PK/1P)


SHRI PAWAN KUMAR BANSAL (CONTD.): Sir, I would, again, like to emphasise here upon the absolutely high standards that are expected of the Actuaries. It is just like the others. This law provides that the associate members and the fellow members of the institute and the students are also treated to be affiliates as such. Sir, I would just like to refer to that provision. Sir, clause 7 talks about the associate members, fellow members, and, then, the right to use after their names the initials AIAI in the case of associate members and in the case of fellow members, it is FIAI. Sir, as for the examinations, etc. -- I have read out the earlier provisions about the objectives of the Institute-- it would be for the Institute to lay down as to what standards they expect and any person who passes the examination, who clears the course that is prescribed for this purpose would be entitled to become a member. Once he becomes a member, only thereafter, he is entitled to practise individually, alongwith others, or, in a management.

Sir, there was a reference, again, to different views, and I appreciate both, about the quantum of penalties provided for in the Bill. Sir, there are two provisions, clause 30 and clause 38. I would request Dr. Singhvi to kindly just bear with me in this clause. We have taken care of the graded sort of penalties. There are options available to the Council to impose any penalty. One is reprimand, as he rightly referred to, this is sub-clause 30 (a). Sir, the first penalty that could be imposed is to reprimand. Second is to remove the name of the member from the register permanently, or, for such period as it thinks fit. So, it is not guillotine, it is not cutting of the head. If the offence or the delinquency of the Actuary concerned is considered to be of a grave nature, the Council may go beyond reprimand. In a given case, the right is absolutely that of the Council -- to remove the name of the member from the register, bar him permanently, or, to remove him only for such period as it deems fit, that is equivalent to suspension, and, then, to impose such fine as it may deem fit, which may extend up to five lakh rupees. I suppose that would meet the concern of Shri Ekanathji when he says that penalties are mild. There is a penalty of five lakh rupees which has been provided in this case, but it is subject to the final decision of the appellate authority. And in the case of clause 38, Sir, which is regarding "penalty for using name of the Institution awarding degrees of Actuarial Sciences, etc." Sir, as we have a mushrooming of fake universities elsewhere, giving certificates which have no value worth the name, to deal with such cases -- the people who are not authorised to practise, their cases have been brought to notice-- we do come across such cases in all the professions, where people who do not possess the requisite qualification, still try to practise that profession-- penalty is a little more stringent because it provides even for imprisonment. In this case, I am not reading the entire thing from clause 38, penalty is, he or she shall be punishable on first conviction with fine which may extend to one lakh rupees and on any subsequent conviction with imprisonment which may extend to one year, or with fine which may extend to two lakh rupees, or with both. Sir, we have taken care of both the situations...(Interruptions)..

SHRI SANTOSH BAGRODIA: Sir, our statement was, in the first instance, something should be done. At least, there should be some kind of...(Interruptions).. That was the difference. It is being taken care of, that is right. (Contd. by 2Q/PB)