New Delhi [India], November 29 : The central government has floated a few proposals for the insurance sector, including raising the FDI limit in Indian insurance companies from 74 per cent to 100 per cent, and enabling an insurer to carry on one or more classes of insurance business and activities.
Further, the requirement of Net Owned Funds for foreign re-insurers is also proposed to be reduced from Rs 5,000 crore to Rs 1,000 crore.
The government has invited comments on the proposed amendments to the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and Insurance Regulatory and Development Authority Act, 1999.
Further, the government proposed amending certain provisions of insurance laws to ensure the accessibility and affordability of insurance to citizens, foster the expansion and development of the insurance industry, and streamline business processes.
"In this regard, a comprehensive review of the legislative framework governing the sector has been done in consultation with IRDAI and the industry," the government office memorandum read.
Also, the government said that insurance regulator IRDAI is being empowered to specify lower entry capital (not be less than Rs 50 crores), for under-served or un-served segments.
Insurance sector regulator Insurance Regulatory and Development Authority (IRDAI) has committed to achieving "Insurance for All" by 2047.
The public is requested to provide comments on the proposed amendments by December 10 via email consultation-dfs@gov.in
Separately, according to a recent report by global consultancy management firm McKinsey, India could potentially save about USD 10 billion annually by expanding insurance penetration to those people and assets that are still uninsured.
A significant portion of India's citizens and insurable assets remain uninsured, increasing the risks of high out-of-pocket expenses, placing a considerable burden on public finances.
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