During the upcoming Parliament Budget Session, the government is set to propose amendments to the Insurance Act, 1938, aiming to achieve ‘Insurance for All by 2047’, sources reported.
Key Points:
- Proposed Amendments:
The amendments aim to introduce provisions like composite licensing, differential capital requirements, and reduced solvency norms. These changes would allow insurers to offer a broader range of products and services, similar to the banking sector’s differentiated models. - Composite Licensing:
Currently, insurers are restricted by the IRDAI from offering both life and non-life products under a single entity. The proposed composite licensing would enable life insurers to underwrite health or general insurance policies, enhancing service offerings. - Capital Norms and Market Entry:
Eased capital norms could facilitate the entry of insurers focusing on micro-insurance, agriculture, or regional markets, fostering economic growth and employment opportunities. - Policyholder Benefits:
The amendments aim to prioritize policyholders’ interests, improve returns, and enhance operational and financial efficiencies within the insurance industry. - Legislative Process:
Once the draft bill is approved by the Union Cabinet, it will be presented in the Budget Session for discussion and potential enactment.
Conclusion:
The proposed amendments to the Insurance Act, 1938, signify a significant step towards enhancing the regulatory framework in the insurance sector. If passed, these reforms could lead to a more dynamic and inclusive insurance market in India, aligning with broader economic goals and ensuring better consumer protection.