The Indian government is getting ready to reform legislation on the insurance sector, according to the Times of India. The changes will allow 100% FDI into the country’s insurance sector, which is currently capped at 74%. They will also allow the entry of larger companies and loosen the regulations on insurers providing only one type of policy.
The changes are part of the Insurance Amendment Bill, which is set to be proposed and discussed during the Parliament’s winter session beginning in late November.
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The plans were laid out at the Business Standard newspaper’s BFSI summit last Friday (November 15).
Debasish Panda, chairperson of the Insurance Regulatory and Development Authority of India (IRDAI), said that for the country to reach its target of “insurance for all by 2047, we need a lot of capital… we need a lot of new entities to come in, there may be some consolidation happening.”
IRDAI’s goal is for every person to have “an appropriate life, health and property insurance cover” and to have “every enterprise [be] supported by appropriate insurance solutions and also to make Indian insurance sector globally attractive.”
According to the Times of India, there are some insurance sectors where coverage is as low as 4% in India’s population of 1.4bn. While there are already major Indian players in the sector, such as the Tatas, HDFC Bank and so on, insurance is a long-term and high-investment business. Foreign capital with deep pockets may be needed to supplement what is already available in the market.
IRDAI has called on the insurance sector to make plans more affordable in the past as seniors began losing coverage due to high costs.
