Budget 2024: Govt likely to introduce insurance laws amendment bill
The government is likely to introduce a bill seeking amendments to the Insurance Act, 1938, during the upcoming Budget session to achieve ‘Insurance for All by 2047’.
Some of the provisions, which could be part of the amendment bill, include composite license, differential capital, reduction in solvency norms, issuing captive license, change in investment regulations, one-time registration for intermediaries and allowing insurers to distribute other financial products, sources said.
The move will enable the entry of differentiated insurance companies like in the banking sector. The banking sector is currently categorised as universal bank, small finance bank, and payments bank.
The provision of composite licenses would allow life insurers to underwrite health insurance or general insurance policies.
As per the provisions of the Insurance Act, 1938, life insurers can only offer life insurance covers, while general insurers can offer non-insurance products like health, motor, fire, marine, etc.
The Irdai does not allow composite licensing for insurance companies, which means that an insurance company cannot offer both life and non-life products as one entity.
The draft bill is ready and it has to go to the Cabinet for its approval, sources said, adding that the finance ministry is hoping that it gets introduced in the upcoming session.