Proposed amendments to the Insurance Act and Insurance Regulatory & Development Authority Act, providing for reforms in the insurance sector, could be passed shortly.
The Department of Financial Services (DFS) in the Finance Ministry has finalised the proposed changes to the two laws, following the receipt of stakeholders’ feedback, reported Hindu Business Line quoting a top Finance Ministry official.
The DFS is understood to have forwarded the proposals to the Law Ministry for further action before sending the draft Bill to the Cabinet for approval. Indications are that the government may introduce the amendment Bill in the second leg of the Budget session beginning on 13 March.
The proposed reforms include allowing composite insurance licences; captive insurers; differential minimum capital requirements after opening up registration to various classes, subclasses, and types of insurers; allowing services to insurers that are incidental or related to insurance business; and allowing insurers to distribute other financial products as specified by the IRDAI.
The aim is to open the insurance industry to more players with diverse operations to increase insurance penetration and inclusiveness.
