The Centre has proposed several amendments to the Insurance Act and the Insurance Regulatory and Development Authority Act as part of its overall effort to encourage product innovation and diversification so as to achieve the goal of ‘insurance for all’ by 2047.
These proposals — once adopted after receipt of public and stakeholder comments — are likely to find their way into an Insurance Amendment Bill. Alternatively, these could form part of the Finance Bill, 2023 as part of the Budget, sources said.
On the anvil are a slew of major reforms including introduction of concept of ‘composite insurance licence’; captive insurers; differential minimum capital requirement after opening up registration to various classes, sub-classes and typesof insurers; allowing services to insurers that are incidental or related to insurance business; and allowing insurers to distribute other financial products as specified by IRDAI.
The latest proposals — which have been put out by the Department of Financial Services in the Finance Ministry for comments by December 15 — are intended to among other things facilitate entry of more players leading to economic growth, employment generation and enabling ease of doing business.
Once composite licences are allowed, insurers can undertake life, general or health insurance under one entity. Prospective insurers can even apply for subclasses like accident and motor insurance.
Anil PM, Head – Legal, Compliance and Fraud Prevention Unit, Bajaj Allianz Life Insurance, said: “The proposal for a composite insurer will align Indian insurance with global markets. Such an insurer will be able to meet the multiple insurance requirements of a customer (life /health / property)”.
