In today’s fast-changing world, every person needs financial security. This is the reason why the Government of India is going to introduce an important Insurance Amendment Bill in the winter session of the Parliament. This bill is being considered a major step towards meeting the goal of ‘Insurance for All’ by 2047.
Under this bill, many important changes will be made in the Insurance Act, 1938.
As a major change, a provision for a single license (composite license) has been made for insurance companies. With this, companies will be able to sell life, general and health insurance products without separate licenses. This innovation can prove to be a big advantage for insurance companies.
Apart from this, the government is also considering allowing insurance companies to sell other financial products like mutual funds, loans, credit cards and bank deposits. This change will also benefit the customers of companies working in life insurance sector like LIC, HDFC Life and Max Life.
Another important proposal is that the minimum capital limit required to start an insurance business may be reduced from ₹200 crore to ₹100 crore. This will directly benefit those new companies who want to enter the insurance industry. Besides, there is also a possibility of increasing the foreign investment limit from 74% to 100%, which will pave the way for attracting foreign capital.
Along with the new changes, new competition and expectation of reduction in GST rate during the GST meeting will also prove to be important in saving the money of the common people.
The role of IRDAI is also going to increase through this bill.
IRDAI may be given the power to make investment rules more flexible. With this, the bill is on track to get approval at the earliest to pave the way for composite licensing.
According to experts, this step can bring unprecedented reforms in India’s insurance sector. This will not only make services more accessible but also provide new business opportunities. Due to this change, a new wave of hope is running in the insurance sector.
