The government intends to amend certain provisions of insurance laws to enhance accessibility and affordability of insurance for citizens, promote the growth and development of the insurance industry, and simplify business processes. A comprehensive review of the legislative framework governing the sector has been conducted in consultation with IRDAI and industry stakeholders. The government is planning to amend Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.
Key Highlights of the Proposed Amendments:
- Policyholder-Centric Reforms:
- Focus on safeguarding policyholders’ interests and strengthening their financial security.
- Market Expansion:
- Encouraging more players to enter the insurance market to boost economic growth and generate employment.
- Efficiency and Ease of Business:
- Streamlining regulations to enhance operational efficiency and ease of doing business.
- Insurance Penetration:
- Aiming to achieve the goal of ‘Insurance for All by 2047’ by increasing insurance penetration.
Major Proposals:
- FDI Increase: Raising the foreign direct investment (FDI) limit in Indian insurance companies from 74% to 100%.
- Business Expansion: Allowing insurers to operate multiple classes of insurance businesses and activities incidental to insurance.
- Lower Entry Barriers for Foreign Reinsurers: Reducing the required Net Owned Funds for foreign reinsurers from ₹5,000 crores to ₹1,000 crores.
- Special Cases for Underserved Segments: Empowering IRDAI to specify a lower entry capital requirement (not less than ₹50 crores) for insurers catering to underserved or unserved segments.
Call for Suggestions:
Stakeholders are invited to provide their comments on the proposed amendments to the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.
- How to Submit:
- Download Comments Performa from here and send email to consultation-dfs@gov.in with the subject line “Suggestions on Proposed Amendments”.
- Deadline: The last date for submitting suggestions is 10th December 2024.
Your feedback is valuable in shaping the future of the insurance sector in India.
