Government Plans Insurance Act Amendment for ‘Insurance for All by 2047’ in Budget Session

During the upcoming Parliament Budget Session, the government is set to propose amendments to the Insurance Act, 1938, aiming to achieve ‘Insurance for All by 2047’, sources reported.

Key Points:

1. Proposed Amendments:
   The amendments aim to introduce provisions like composite licensing, differential capital requirements, and reduced solvency norms. These changes would allow insurers to offer a broader range of products and services, similar to the banking sector’s differentiated models.
2. Composite Licensing:
   Currently, insurers are restricted by the IRDAI from offering both life and non-life products under a single entity. The proposed composite licensing would enable life insurers to underwrite health or general insurance policies, enhancing service offerings.
3. Capital Norms and Market Entry:
   Eased capital norms could facilitate the entry of insurers focusing on micro-insurance, agriculture, or regional markets, fostering economic growth and employment opportunities.
4. Policyholder Benefits:
   The amendments aim to prioritize policyholders’ interests, improve returns, and enhance operational and financial efficiencies within the insurance industry.
5. Legislative Process:
   Once the draft bill is approved by the Union Cabinet, it will be presented in the Budget Session for discussion and potential enactment.

Conclusion:
The proposed amendments to the Insurance Act, 1938, signify a significant step towards enhancing the regulatory framework in the insurance sector. If passed, these reforms could lead to a more dynamic and inclusive insurance market in India, aligning with broader economic goals and ensuring better consumer protection.