Target to provide life, health and property insurance to every citizen of the country by 2047

The scope of insurance sector in the country is now going to increase. Insurance regulator IRDA has proposed massive reforms in the industry. The aim of this exercise is to provide life, health and property insurance cover to every citizen of the country by the year 2047. This is the biggest reform ever in the insurance industry.

Only 4.2 percent of the reach of insurance in the country

Right now the scope of insurance in the country is very limited. The report of IRDA itself states that in the year 2020-21, the reach of insurance in the country was only 4.2 percent. This means that only 4.2 percent of the amount of insurance premium is contributed to the country’s GDP. For the last few months, the regulator has been taking rash decisions to increase the reach of insurance.

Relaxation of all kinds of rules to promote investment

The regulator thinks that more and more companies should come in the insurance industry, which provide products according to the needs of the customers. Under this thinking, the process of registration of new insurance companies has been simplified. Various rules have been relaxed to encourage private sector investment. Provision has been made for corporate and insurance marketing agents selling insurance products to work with independence. Arrangements have also been made to enable insurance companies to raise money easily from the market.

Insurance companies are expected to get Rs 3500 crore in cash

IRDA has given relaxation in the rules regarding keeping amount in lieu of solvency margin so that insurance companies do not face capital shortage. Insurance companies are expected to get cash of Rs 3500 crore due to reduction in solvency margin. To increase investment in this sector, direct investment of private equity funds in insurance companies has been approved. Till now PE funds had to set up a separate company for investing in the insurance sector. Now this requirement has been done away with.

Now companies will be able to speed up their business with freedom

This means that the subsidiary units of industrial houses will now be able to start insurance business on their own. Along with this, the definition of promoter has also been changed. Till now only those holding more than 10 percent equity were considered as promoters. Now this limit has been increased to 25 percent. The regulator has allowed a single investor to hold up to 25 per cent of the total paid-up capital of an insurance company. That is, now companies will be able to speed up their business with freedom.

Blueprint ready to start Bima Sugam portal

The regulator has prepared a blueprint for starting the Bima Sugam portal. This will help in increasing the reach of insurance among the common people. It is believed that just as UPI has revolutionized digital transactions, similarly this portal will prove to be a revolutionary step in increasing the reach of insurance in the country.