New Delhi. The Finance Ministry is considering changes in the insurance legislation to extend the attain of insurance in the nation. These additionally embrace a proposal to cut back the minimum capital requirement. Insurance penetration in the nation has elevated from 3.76 % in 2019-20 to 4.20 % in 2020-21. This works out to a progress of 11.70 %.
There has been a major improve in insurance penetration, as measured by the proportion of insurance premium to GDP, primarily because of the COVID-19 pandemic. Sources stated that the ministry is enterprise a complete evaluation of the Insurance Law, 1938 and needs to make some acceptable changes for the expansion of the sector. He stated that this course of is nonetheless in the preliminary stage.
Sources stated the ministry desires to cut back the minimum capital requirement for beginning an insurance business from Rs 100 crore. Reducing the minimum capital requirement will allow several types of firms to enter the insurance business like in the banking sector. Sources stated that by stress-free this provision, micro insurance, agricultural insurance and insurance firms with regional orientation will additionally be in a position to enter the insurance business.
Sources stated that the entry of latest gamers will not solely improve the penetration of insurance however will additionally generate employment. Apart from this, the Parliament has handed the General Insurance Business (Nationalised) Amendment Bill, 2021. With this, the federal government can convey down its stake in an insurance firm to under 51 per cent of the fairness capital. This will open the best way for privatization.
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Tags: finance ministry, Insurance
FIRST PUBLISHED : September 11, 2022, 16:51 IST
