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The central government may introduce a bill to amend the Insurance Act, 1938 in the next budget session to achieve the goal of universal insurance by 2047. According to available information, some of the provisions to be included in the research bill include changes in overall license, capital, solvency relief, issuance of license, investment. This includes registration and approval of insurance companies and allowing them to distribute other financial products.
People will get this facility
The move may allow entry of various insurance companies like in the banking sector. The banking sector is currently classified as universal banks, small finance banks and payment banks. The composite licence provision will allow life insurance companies to underwrite health insurance policies 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, motor, fire, etc.
Draft ready, will be sent to cabinet
IRDA does not allow blanket licensing of insurance companies. In such a situation, the insurance company cannot offer both life and non-life products as one entity. Sources said the draft bill is ready and will be sent to the Cabinet for approval. They said the Finance Ministry hopes to introduce it in the next session.
This is the main reason for bringing the bill
According to the information, the proposed research is mainly to promote the interest of policy holders, improve returns to policy holders, facilitate more people to join and access, promote employment generation, manage the insurance industry. Also the money is focused on more flexible business flexibility. The Ministry of Finance invited comments on the proposed amendments to the Insurance Act 1938 and Insurance Regulation 1999 in December-2022.
