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 will allow insurers to sell other financial products related to insurance business.
According to reports, the Union Cabinet may soon consider the Insurance Laws Amendment Bill 2022. The Bill proposes changes to the Insurance Act 1938 and the Insurance Regulatory and Development Authority (IRDA) Act 1999.
CNBC-TV18 quoted sources as saying that the proposed amendments to the Acts are unlikely to bring about significant changes and the cabinet may consider the amendments in its next meeting.
The report states that as per the amendment bill, the government proposes to do away with the minimum capital requirements prescribed for life and non-life insurance companies.
In November last year, the government had suggested several changes in the two Acts related to the insurance sector after consultation with IRDA and sought comments from the public as well as stakeholders to prepare the final draft of the amendment bill.
The Insurance Act of 1938 may be amended to allow insurers to provide a variety of related services to customers. For example, people who buy health insurance can also get gym memberships, and those who buy auto insurance can get services related to vehicle maintenance.
The Insurance Laws Amendment Bill 2022 proposes to allow composite licensing to insurance companies, which means insurers can offer both life and non-life plans to customers. Insurance companies may also be permitted to sell other financial products or services related to or incidental to the insurance business after the amended laws come into force.
Far-reaching changes have been proposed by the government in the Insurance Act 1938 and the IRDA Act 1999, which could transform the insurance sector in the country. The government may do away with the condition of minimum capitalization of Rs 100 crore, replacing it with a specification made by IRDAI based on the scope and size of activities, class or subclass of insurance company and category of insurance plans.
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