Government Plans Insurance Act Revisions in Budget Session
The Indian government reportedly aims to introduce a bill in the upcoming Budget session to amend the Insurance Act, 1938. The objective is to achieve “Insurance for All by 2047.”
According to a PTI report, the proposed changes include:
* Lower solvency requirements
* Composite license to operate both life and general insurance
* Differential capital requirements
* Revised investment norms
* Simplified registration process for intermediaries
The revisions aim to encourage specialized insurance companies to enter the banking sector. Currently, banks are categorized as universal banks, small finance banks, and payments banks.
The draft bill has been prepared and will be submitted to the Cabinet for approval. The Finance Ministry hopes to introduce the bill in the upcoming Budget session.
The amendments focus on enhancing policyholder protection and increasing returns for customers. They also aim to attract more players to the industry, fostering economic growth and employment creation.
The revisions are expected to improve the operational and financial efficiency of the insurance industry and ease the conduct of business.
In December 2022, the Finance Ministry sought feedback on proposed revisions to the Insurance Act, 1938, and the Insurance Regulatory Development Act, 1999.
Currently, India has 25 life insurance companies and 32 general insurance companies, including specialized firms like ECGC Limited and the Agriculture Insurance Company of India Ltd.
