Sources said some of the provisions that may be included in the amendment bill include composite license, differential capital, relaxation in solvency norms, issuance of captive license, changes in investment rules, one-time registration for intermediaries and allowing insurance companies to distribute other financial products.

You will get this facility

This move may allow the entry of different insurance companies like in the banking sector. The banking sector is currently classified as universal banks, small finance banks and payment banks. The provision of overall license will allow life insurance companies to underwrite health insurance 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, vehicle, fire etc.

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Draft is ready, will be sent to the cabinet

IRDA does not allow overall licensing for insurance companies. In such a situation, an insurance company cannot provide both life and non-life products as a unit. Sources said that the draft of the bill is ready and it has to be sent to the Cabinet for approval. He said that the Finance Ministry hopes that it will be introduced in the upcoming session.

That is why the bill is being brought

Sources said that the proposed amendments mainly focus on promoting the interests of policy holders, improving returns to policy holders, facilitating the entry of more participants, promoting economic growth and employment generation, increasing the operational and financial efficiency of the insurance industry and ease of doing business. The Finance Ministry had invited comments on proposed amendments to the Insurance Act, 1938 and the Insurance Regulatory Development Act, 1999 in December 2022.

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According to sources, this change of LIC can be of great benefit to the customers. Explain that there is a provision in the proposed bill that if any applicant can register and apply for one or more categories of insurance business of any category.

If any company has a composite license, then in this situation it can offer both general and health insurance services through the same company. For this, they will not have to do separate insurance. According to the agency, in the event of the passing of the LIC Insurance Amendment Bill, the composite license and all other issues related to insurance will be considered keeping in mind the Life Insurance Corporation Act, 1956.

At the same time, re-insurance companies are prohibited from getting registered for any other category of insurance business. Composite licensing will enable insurance companies to offer general and health insurance services through a single entity. It is believed that to amend the Insurance Act 1938 and the Insurance Regulatory and Development Authority Act, 1999, this bill can be tabled in the budget this year. The Finance Ministry is currently planning to make major changes in the insurance law.

Customers will get good returns

The Finance Ministry is planning to make large-scale changes in the insurance law to promote the policyholders and keeping in mind their interests. With this, apart from getting good returns to the policyholders, new employment opportunities will also be created in the market, which will also boost economic growth. At present, there are 24 life insurance companies and 31 non-life or general insurance companies operating in the country.

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