Insurance Bill : Currently in India there are 12 life insurance companies, 26 general insurance companies, six independent health insurance companies and General Insurance Corporation is the only reinsurance company.
The Insurance Amendment Bill is proposed to be introduced in the winter session of Parliament starting later this month. Some such provisions have been made in this bill, which will completely change the Indian insurance sector. This bill has a provision for 100% foreign direct investment (FDI) in the insurance business and allowing individual insurance agents to sell policies of multiple companies. As of now, the agent can sell the policy of only one life insurance and one general insurance company. The FDI limit in insurance companies is 74%, while it has already been removed for intermediaries.
Currently, India has 12 life insurance companies, 26 general insurance companies, six independent health insurance companies and General Insurance Corporation is the only reinsurance company. According to a Times of India report, Debashish Panda, the head of the Insurance Regulatory and Development Authority of India (IRDAI), had publicly suggested raising the FDI limit to 100 percent earlier this month.
Insurance sector is only partially open for FDI
Insurance is one of the consumer related sectors which is only partially open for FDI. Whereas all other sectors have progressed in terms of FDI. During the last 9 years, FDI sector has received about Rs 54 thousand crores of foreign direct investment. This amount has come due to the relaxation in policies by the government in FDI. Due to this, foreign investors are being attracted to India in large numbers.
Market experts say that if 100% foreign direct investment is allowed in the insurance sector, it will be very beneficial especially for long-term life insurance business. This step of the government is expected to boost investment in the insurance sector and provide more options to consumers. At the same time, it can also play an important role in materializing the government’s slogan of “Insurance for All 2047”.
