Centre clears Rs. 11,640 crore payout for PSU insurers, RBI and NABARD
The Centre has approved a retrospective wage and pension revision for employees of public sector general insurers, the Reserve Bank of India and the National Bank for Agriculture and Rural Development, resulting in a combined payout of Rs. 11,640 crore.
Public sector general insurers will account for Rs. 8,170 crore, including Rs. 5,823 crore in arrears, Rs. 250 crore towards National Pension System contributions and Rs. 2,098 crore for family pensions. Around 43,247 employees and 14,615 family pensioners across National Insurance Company Ltd, New India Assurance Company Ltd, Oriental Insurance Company Ltd, United India Insurance Company Ltd, General Insurance Corporation of India and Agricultural Insurance Company Ltd will benefit.
RBI’s share stands at Rs. 2,697 crore, while NABARD’s impact is estimated at Rs. 773 crore. The move comes amid solvency pressures at some PSU insurers, prompting speculation over potential consolidation or capital infusion measures
Unpaid toll fee to block vehicle NOC and fitness certificate
The Union government has amended the Central Motor Vehicle Rules to link unpaid national highway toll dues with vehicle-related services such as issuance of no-objection certificates and fitness certificates.
Under the revised rules notified by the Ministry of Road Transport and Highways, a new definition of “unpaid user fee” has been introduced. It covers toll charges recorded through electronic toll collection systems but not received in accordance with the National Highways Act, 1956.
Vehicle owners will not be granted an NOC for transfer of ownership or inter-state transfer unless pending toll dues are cleared. The move is aimed at strengthening compliance and discouraging toll evasion, particularly ahead of the rollout of the Multi-Lane Free Flow system that enables barrier-less tolling.
The amendment seeks to enhance efficiency in electronic toll collection and ensure timely recovery of highway user charges across the network.
IFSCA begins work on Special Purpose Insurance framework
The International Financial Services Centres Authority is developing a Special Purpose Insurance framework to facilitate underwriting of complex risks such as cyber and wildfire through structured vehicles in GIFT City.
Speaking at a reinsurance summit, Chairman K Rajaraman said the framework would enable insurers and reinsurers to standardise offshore solutions and attract global institutional capital. The initiative is designed to expand the risk mix and create avenues for innovative insurance products not currently available onshore.
South Africa-based Santam Ltd has approached the regulator seeking approval to undertake reinsurance operations from GIFT IFSC through an Insurance Office structure.
The proposed framework is expected to deepen the reinsurance market within India’s International Financial Services Centre and position it as a competitive offshore hub for specialised risk transfer solutions.
ICICI Lombard targets premium growth outperformance in Q4 FY26
ICICI Lombard General Insurance expects to outperform industry premium growth by 100–200 basis points in the fourth quarter of FY26, supported by regulatory and government measures.
Chief Financial Officer Gopal Balachandran said industry growth has turned double-digit in the third quarter after a single-digit expansion in the first half of the fiscal. He noted that reforms and changes in goods and services tax for insurance have supported sector-level momentum.
The company reported 13.3 per cent year-on-year growth in gross direct premium income to Rs. 7,041 crore in Q3 FY26. During April–December FY26, premiums grew 3.6 per cent to Rs. 21,372 crore.
The insurer plans to focus on motor, health and commercial lines, leveraging historical trends where it has typically outperformed the broader industry during periods of recovery and regulatory support.
Ill-fated aircraft carried Rs. 210 crore liability cover
The aircraft carrying Maharashtra Deputy Chief Minister Ajit Pawar was insured with a liability cover of Rs. 210 crore under an aviation policy issued by ICICI Lombard General Insurance.
The aircraft, owned by VSR Aviation, was valued at Rs. 50 crore and solely insured by ICICI Lombard. The insurer stated that its exposure under the policy is supported through adequate reinsurance arrangements in line with its risk management framework. The company also expressed condolences to the affected families and said it is coordinating with authorities to facilitate the claims process in accordance with policy terms and regulatory requirements.
VSR Aviation operates as a Non-Scheduled Operator, with its Air Operator Permit last renewed in April 2023 and valid till April 2028. The operator currently maintains a fleet of 17 aircraft.
Shriram General Insurance Q3 profit rises 26%, eyes stronger bancassurance
Shriram General Insurance reported a 26 per cent year-on-year rise in net profit to Rs. 165 crore in Q3 FY26, driven by a 19 per cent growth in gross direct premium income.
Premium income rose to Rs. 1,258 crore from Rs. 1,061 crore a year earlier, supported by 19 per cent growth in the motor segment. Personal accident and fire segments recorded growth of 15 per cent and 3 per cent, respectively. For the first nine months of FY26, the insurer posted 24 per cent premium growth, ahead of the non-life industry’s 8.69 per cent growth.
The company’s combined ratio stood at 98.57 per cent in Q3 FY26 compared with 95.18 per cent in the corresponding period last year. Management said it aims to raise the contribution of the bancassurance channel from the current 1–2 per cent to at least 5 per cent of overall distribution.
New Insurance Act allowing 100% FDI comes into effect
The Centre has notified February 5, 2026 as the effective date for implementation of the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, enabling 100 per cent foreign direct investment in the insurance sector.
The legislation amends the Insurance Act, 1938, the Life Insurance Corporation of India Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999. While allowing full foreign ownership, the law mandates that key managerial positions such as Chairman, Managing Director and Chief Executive Officer must be held by Indian citizens.
The Act also permits merger of non-insurance companies with insurers, eases licensing norms for intermediaries and raises the threshold for prior approval of share transfers from 1 per cent to 5 per cent. The net owned fund requirement for foreign reinsurance branches has been reduced to Rs. 1,000 crore.
The move aims to deepen insurance penetration and attract long-term global capital into the sector.
Centre launches PM RAHAT scheme for road accident victims
The Union government has launched the PM RAHAT (Road Accident Victim Hospitalisation and Assured Treatment) scheme to provide cashless emergency care to road accident victims during the critical “golden hour.”
Approved by Prime Minister Narendra Modi, the scheme entitles victims to cashless treatment up to Rs. 1.5 lakh per person for a maximum of seven days from the date of accident. Stabilisation treatment will be provided for up to 24 hours in non-life-threatening cases and up to 48 hours in life-threatening cases, subject to police authentication through an integrated digital system.
The scheme will be integrated with the Emergency Response Support System 112 and supported by a technology platform linking accident reporting, hospital admission and claims processing. Reimbursements will be routed through the Motor Vehicle Accident Fund.
The initiative seeks to reduce fatalities by ensuring timely medical intervention and addressing financial uncertainties faced by hospitals in emergency cases.
Tax exemption on MACT interest to reduce disputes and speed up settlements
The Centre’s proposal to exempt interest awarded by the Motor Accident Claims Tribunal (MACT) from income tax is expected to reduce litigation and accelerate insurance claim settlements.
As per the Union Budget announcement, any interest granted on compensation by MACT to a natural person will be fully exempt from income tax. Additionally, no tax will be deducted at source on such interest, regardless of the amount awarded. The amendment will take effect from April 1.
Experts said the move resolves long-standing ambiguity around the taxability of interest awarded under court or tribunal orders. Earlier, questions over deduction of tax at source and the treatment of such interest in the recipient’s tax bracket had led to disputes and compliance challenges.
Tax advisors noted that the clarification will ease the burden on accident victims and their families while reducing administrative friction for insurers. The measure is expected to streamline claims processing and minimise delays linked to tax-related complications.
