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You will be glad to know that I am also a member of the Institute of Chartered Accountants of India. I became the member of the Institute long ago way back in 1959. I consider it to be the best qualification for progress in life. Training imparted for becoming a Chartered Accountant enables one to do two things - hard work and to be ethical in his work. With these two qualities, you can get into any organisation or anywhere in the world. We professionals are in the service sector which contributes over 55% of the GDP of the economy of the country. There has been phenomenal growth in the service sector. Earlier industrial sector contributed a greater portion but its share has shrunk to 25% only. The three sectors banking, insurance & pension and capital markets are interdependent on each other. The efficient capital market depends upon banking and financial sector as investments have to come from these two sectors. It is the insurance sector which provides long term financial resources in the capital market. Unless we have an efficient insurance market in the country we cannot have a vibrant capital market.

The pension industry can provide more long term funds than insurance industry. Unless these two sectors are properly guided and monitored, we can not have proper growth and progress. To a large extent the growth of insurance sector has been nurtured by government by opening the insurance sector for private operators. In the initial years where people were interested to enter insurance industry, they had their own reservations. They were besieged with three problems, whether opening would be possible, adequate business and existence in the private sector.

We in India have proved to the world that we can run efficient insurance industry based on prudential norms and less interference from Regulators. Where a proactive mechanism which was set in motion by the Regulator to be adopted by insurance industry, none of them had any hope that in first 5 years of opening they will get 2-3% of the business put together. Today in life insurance industry though Life Insurance Corporation is predominating factor and will continue to be the same for next 30-40 years, where LIC business will be much more than the combined total of all other operators. LIC now has 84% of the market share and 16% has gone to the private players which is no mean achievement. The more you do the business of life insurance, the more capital is required to finance it. After a plato of 9-10 years there is release of funds which enables to go for merger and acquisitions. That's the reason you find that life insurance companies are front members to acquire various businesses. In general insurance the private players have 15% share which is also no mean achievement.

We have a very active insurance industry in this country. This industry will contribute for long term investment needs of the Indian market. The more of insurance companies in Indian market the more will competition increase which will enable the reasonable pricing and basis of satisfaction of customers. Also it enable the customer to make choice regarding products from a wide variety of products and satisfactory settlement of the claims in time. As we see after 30-40 years of our existence, we will have more companies, more competition in the area for better growth of this country.

Pension markets are still non-developed market in this country. Though existing life insurance companies are permitted to do pension business. The coverage today of post retirement benefits is hardly 11% of the working population, the rest 89% of our working population is not covered by any scheme of post retirement benefits. I am sure when Government of India has its attention, the accumulation of pension funds for long term investment will be much larger then life funds. The pension funds will be expected to be 3 times than life funds. We in the financial industry sector are not going to be fully effected unless there is proper intermediation between service providers and market. There has to be somebody specialised in reaching the consumer and carry the message of saving and develop the market. Glad to say many of our members have taken intermediation in insurance sector which has added value to the insurance industry. Today we have different intermediaries for different sectors. As for capital markets SEBI prescribes various rules and regulations. We must have intermediaries for insurance industry as well. In years to come, we will have only one financial intermediary who will be well versed and act with ethical standards.

When President of ICAI came to me two years back, we encouraged the Institute to go for Post Qualification Course in Insurance and Risk Management (DIRM). I am glad to know that over 1600 members have got registered for the course. More and more Chartered Accountants are going in for intermediation of the industry. We are today in the market, developing different products which are being launched for the first time.

We are going to play a very leading role in insurance market. It is to assist industrialist to assess his risks and how those risks can be passed to somebody. As we know insurance premium is a tax deductible expenditure and if unfortunately on materalisation of the risk, replacement capital is to be provided to face the situation. Large number of companies fight each other to get the business. Depending upon the quality of products and customer needs everybody will get business.

An accountant has been charged with responsibility of accumulating, recording, retrieving and using facts. Today accountant has been replaced and all these are done in a very cost effective manner by computer. The necessity of accountant to do battle with account books is no more. We have to meet the challenges and something more needs to be done. The primary challenge is to put members for developing orientation towards modern industry. We must encourage for quality time. Not sure about the compensation we get. Still there are people in the country who act professionally and not monetary driven. People who can spend time to think. Let us not waste our time, organise it. It is a gainful occupation for the profession.

I would like to end by saying that it's a privilege to be a Chartered Accountant and let us not forget the strains to reach there. We have a reputation to protect, we have protected it so far. Let me say that this is today one of the finest professional body of the country and I am proud to be associated with this body for over 42 years. Sunil (The President) and his dedicated team of Council Members will meet the challenges. Let us see that the Institute continues to maintain its glory, for that we need your sacrifice of time and attention. I am sure it will come in large measure.

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