2023 promises to be a transformative year for insurance sector

Chennai, Dec 29 The year 2023, like its predecessor, is going to be action packed and transformative for the Indian insurance sector given the far reaching legal and regulatory changes proposed/made, said top industry officials.

They also said the macroeconomic factors may have an impact on the purchase of life insurance covers in the short run.

The amendments proposed to the Insurance Act 1938 and the Insurance Regulatory and Development Authority Act 1999 proposed by the Indian government alters the basic architecture on which the industry grew over the past 20 plus years.

Scrapping of the statutory Rs 100 crore startup capital for life, general and health insurance business and Rs 200 crore for reinsurance business, allowing different kinds of insurers including captives, changing the investment provisions; allowing insurers to provide services related or incidental to insurance business and distribute other financial products as specified by and subject to regulations. are some of the major amendments proposed by the Indian government to the insurance laws.

Welcoming the proposed amendments, Niraj Shah, Chief Financial Officer, HDFC Life Insurance Company, told that it is important from the perspective of overall development of the sector.

"Another key change proposed is allowing insurance companies to distribute other financial services products. This has also been an ask from HDFC Life and would give the industry the ability to earn fee income by leveraging our existing distribution architecture to offer a one stop solution to customers," Shah said.

"The proposed regulation on composite licences insurers allowed to sell life and general insurance policies may result in expanding business lines for insurers and a potential increase in M&A

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