Economictimes, December 05, 2022
The government is likely to introduce the Insurance Laws (Amendment) Bill, 2022, which will pave the wayfor issue of composite licence to insurers, in the budget session of Parliament, officials said.
A composite licence, which will allow insurers toundertake general and health insurance via a singleentity, has been a key industry demand. “Our aim is to bring the legislation in the budgetsession. It, however, will depend on how swiftly wecan incorporate suggestions and seek cabinet approvalfor the proposed legislation,” said a senior official aware of the developments.
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Last week, the finance ministry invited comments onamendments proposed to the Insurance Act, 1938 andthe Insurance Regulatory and Development AuthorityAct, 1999. “The proposed amendments primarily focuson enhancing the fi nancial security of thepolicyholders, promoting the policyholders’ interests,improving returns to the policyholders, andfacilitating the entry of more players in the insurancemarket, leading to economic growth and employmentgeneration,” the ministry said while seekingcomments from all stakeholders. The last date forsending comments is December 15.
Another official said that since the proposed amendments have been made after extensiveconsultation with industry and the regulator, theydon’t expect any delays. “Hopefully, by the end of thewinter session, all approvals will be in place, andsubsequently it could be announced and approvedduring the budget session,” he said.
The bill proposes to remove the Rs 100-croreminimum paid-up equity capital requirement forcarrying out life, general and health insurancebusiness, as part of a signifi cant revamp of insuranceframework.
The ministry, while inviting comments, had noted thatthe aim is to enhance effi ciencies of the insuranceindustry — operational as well as financial — and enable ease of doing business. “The proposal includesvarious measures such as opening up registration tovarious classes, sub-classes and types of insurers withappropriate minimum capital requirements asspecifi ed by (sector regulator) Irdai,” it said.
This is being done in view of the changing needs of theinsurance sector, the ministry said. Areview of thelegislative framework governing the sector has beendone in consultation with the Insurance Regulatoryand Development Authority of India and the industry,it said.
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