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 may be included in the amendment bill include composite license, differential capital, relaxation in solvency norms, issuance of captive license, changes in investment rules, one-time registration for intermediaries and allowing insurance companies to distribute other financial products.
You will get this facility
This move may allow the entry of different insurance companies like in the banking sector. The banking sector is currently classified as universal banks, small finance banks and payment banks. The provision of overall license will allow life insurance companies to underwrite health insurance or general insurance policies. As per the provisions of the Insurance Act, 1938, life insurance companies can provide only life insurance cover, while general insurance companies can provide non-insurance products like health, vehicle, fire etc.
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Draft is ready, will be sent to the cabinet
IRDA does not allow overall licensing for insurance companies. In such a situation, an insurance company cannot provide both life and non-life products as a unit. Sources said that the draft of the bill is ready and it has to be sent to the Cabinet for approval. He said that the Finance Ministry hopes that it will be introduced in the upcoming session.
That is why the bill is being brought
Sources said that the proposed amendments mainly focus on promoting the interests of policy holders, improving returns to policy holders, facilitating the entry of more participants, promoting economic growth and employment generation, increasing the operational and financial efficiency of the insurance industry and ease of doing business. The Finance Ministry had invited comments on proposed amendments to the Insurance Act, 1938 and the Insurance Regulatory Development Act, 1999 in December 2022.
