As the insurance industry is suffering from a persistent slowdown for the past few years, the appointment of insurance veteran TS Vijayan as the new IRDA chairman has raised hopes about a turnaround.

Sixty-year-old Vijayan, former chief of the Life Insurance Corporation of India (LIC), became the new insurance regulator after former regulator J Hari Narayan retirement earlier this week.

Mr. Vijayan has become IRDA chief at a time when the industry is facing many challenges, including large-scale surrender of insurance policies. In financial year 2012, life insurance firms had to pay Rs 71,208 crore on account of surrender of policies. LIC alone paid Rs 41,531 crore. Unit-linked insurance plans (ULIPs) accounted for nearly 68 per cent of the total surrenders for LIC and a whopping 97 per cent for private insurance firms.

Now, all eyes are on Mr. Vijayan's abilities. G Murlidhar, managing director of Kotak Life Insurance, welcomed Mr. Vijayan's appointment as the new IRDA chief, adding that he had a strong experience in the insurance sector, so he would be able to quickly come with the solutions needed to put the situation right.

It is perhaps the first instance that a financial industry professional has been appointed as the chief of regulatory body of the same sector.

Mr. Vijayan will get a five-year term. The tenure for the post of IRDA chairman is five years or till the age of 65, whichever is earlier.