The Government of India is set to propose the Insurance Laws (Amendment) Bill, 2022, in the upcoming monsoon session of parliament, according to the New Indian Express (TNIE), citing a government official.
If passed, the bill will allow single entities to leverage composite licences to foray into the non-life insurance space and vice versa.
The bill aims to amend provisions of the existing Insurance Act 1938 and the Insurance Regulatory and Development Authority Act 1999.
Last November, India’s finance ministry invited feedback from the public on the proposed changes in both acts.
A few amendments presented in the bill are insurance intermediaries, captive insurers, insurance businesses, personal accident insurance businesses and others.
The government official was quoted by TNIE as saying: “The bill will bring far-reaching reforms in the sector. The composite licence is one such big reform.
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“The bill proposes to remove Rs1bn ($134m) minimum paid-up equity capital requirement for carrying out insurance businesses in India.”
According to the official, the amendments in insurance law will help new players to enter India’s insurance industry. This will also lead to additional economic development by creating new jobs.
The official added: “Amendments in the bill are aiming to provide financial security to the end consumers and better returns for the businesses. It will enable ease of doing business.
“After the passage of the bill in the monsoon session, the reforms will be implemented in the current financial year.”
Earlier this month, Bloomberg reported that India was considering amending rules to support the growth of the country’s $731bn insurance market.