The recently approved Insurance Bill is expected to revamp the functioning of the Indian insurance sector with its forward-looking initiatives. The bill will help the insurance sector with access to funds, consumer welfare, governance, and empowering the IRDAI. It has been drafted keeping in mind global insurance practices and the evolving Indian insurance sector.
With FDI cap hiked to 49%, the sector is scheduled to get more competitive, which in turn can benefit customers in the form of low premium rates and consumer-centric policies. Smaller insurance companies can revive by collaborating with foreign counterparts and in turn, foreign insurance companies can benefit by accessing the huge Indian insurance market. Investors can now invest in IPOs offered by such insurance companies.
Reinsurance and Health Insurance are not that popular in India. This bill has provisions to promote these segments by redefining Reinsurance and treating Health insurance as a separate vertical. Empowering IRDAI, strengthening Industry Councils and ensuring a swift Appellate Process are top regulatory measures put forth by the insurance bill. To curb mis-selling and increase accountability, the IRDAI can now levy a fine of `25 crore on an insurance company. These measures will benefit all stakeholders of the Indian insurance sector.