The Bill proposes changes to the Insurance Act 1938 and the Insurance Regulatory and Development Authority (IRDA) Act 1999.
The change is being suggested to include a new clause that would permit insurers to sell other financial products related to insurance business.
NThe Union Cabinet is likely to consider the Insurance Laws Amendment Bill 2022 soon, according to reports. The Bill proposes changes to the Insurance Act 1938 and the Insurance Regulatory and Development Authority (IRDA) Act 1999.
Significant changes to the proposed modifications in the Acts are unlikely and the Cabinet could consider the amendments in its next meeting, CNBC-TV18 reported quoting sources.
As per the Amendment Bill, the government proposes to do away with the prescribed minimum capital requirements for life and non-life insurance companies, the report added.
In November last year, the government, after consultation with IRDA, had suggested several changes to two Acts related to the insurance sector and sought comments from the public as well as stakeholders to prepare the final draft of the Amendment Bill.
The Insurance Act of 1938 could be amended to allow insurers to provide a variety of related services to clients. For instance, those who purchase health insurance may also receive a gym subscription, and those who purchase auto insurance may also receive services related to vehicle maintenance.
The Insurance Laws Amendment Bill 2022 proposes to allow insurance companies composite licences, which means the insurers can offer both life and non-life plans to customers. The insurance companies may also be allowed to sell other financial products or services related or incidental to insurance business, once the amended laws come into effect.
Far-reaching changes have been proposed to the Insurance Act 1938 and the IRDA Act 1999 by the government, which could transform the insurance sector in the country. The government may do away with the prerequisite for a minimum capitalisation of Rs 100 crore, replacing it with a specification made by the IRDAI based on the scope and size of activities, class or subclass of an insurance company, and category of the insurance plans.
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