The IRDAI chairman said that the insurance regulator is in favor of issuing composite licenses in the insurance sector so that new insurance companies can do business in the market. Many units desirous of working in the life and general insurance market are inquiring in this regard.
In the coming days, customers can get the gift of better insurance products and services, as 18 more new insurance companies are expected to enter the market. Debasish Panda, chairman of insurance regulatory body IRDAI, has expressed the possibility of this in an interview given to CNBC-TV18.
IRDAI chairman said that the insurance regulator is in favor of issuing composite license in the insurance sector, which is a common license to operate in life and general insurance market. He said that new interested units are making inquiries in this regard.
The New insurance Company Was Last Approved in 2017
Debashish Panda said that a new insurance company was last approved in 2017. Today after five years, we have approved an insurance company by the name of Kshema General Insurance and another company is also ready. However, we are yet to come up with a proposal in this regard. But we are hopeful that this should also be approved in the next board meeting and another 18 companies are also in the pipeline.”
The Insurance Regulatory and Development Authority of India (IRDAI) has suggested the government to reduce the minimum capital requirement of Rs 100 crore and allow the regulator to decide the amount based on the business plans of the prospective company.
How do Customers Benefit From New Companies?
The abolition of the minimum capital requirement of Rs 100 crore will allow smaller, specialized and better companies to do business in the insurance sector and this will lead to greater sales and penetration of insurance products in the country. Customers will get the direct benefit of this, because due to the competition in the market, new companies will offer attractive plans and discounts on premiums to the customers.
Explain that the insurance regulator wants approval for 100 percent foreign direct investment (FDI) in the insurance sector. At present, the upper limit of FDI in companies writing insurance cover is 74 per cent.
