The government may introduce a bill to amend the Insurance Act 1938 in the budget
The government may introduce a bill to amend the Insurance Act, 1938 during the upcoming budget session to achieve the goal of insurance for all by 2047. Sources said some of the provisions that could be included in the amendment bill include comprehensive licensing, differential capital, relaxation of solvency norms, issuance of captive licenses, changes in investment rules, single registration for intermediaries and insurance companies to distribute other financial products. Including giving permission.
You will get this facility
With this step, different insurance companies will be allowed to enter like the banking sector. Currently, the banking sector is classified into Universal Bank, Small Finance Bank and Payments Bank. The grant of a general license will allow life insurance companies to write health insurance or general insurance policies. As per the provisions of the Insurance Act, 1938, life insurance companies can only offer life insurance cover, while general insurance companies can offer non-insurance products like health, vehicle, fire, etc.
Draft ready, will be sent to the cabinet
IRDA does not allow general licences for insurance companies. In such a situation, an insurance company cannot offer life and non-life products as a single unit. Sources said the draft of the bill is ready and will be sent to the Cabinet for approval. He said the Finance Ministry is expecting it to be tabled in the next session.
That is why the bill is being presented.
Sources said the proposed amendments are primarily aimed at promoting the interests of policyholders, improving returns for policyholders, facilitating entry of more participants, promoting economic growth and employment generation, improving operational and financial performance of the insurance industry and focusing on increasing efficiency and ease of doing business. The Ministry of Finance had sought comments on the proposed amendments to the Insurance Act, 1938 and the Insurance Regulatory Development Act, 1999 in December 2022.
