IRDAI Says Considering Changes To Laws To Enhance Insurance Penetration: Report
According to a report, Debasish Panda, chairman of the Insurance Regulatory and Development Authority of India said that revisions to insurance regulations encompass several key aspects
As global insurance firms are looking to enter the Indian market, the country's insurance regulator said that it is deliberating on introducing rule changes to enhance insurance penetration. According to a report by Bloomberg, Debasish Panda, chairman of the Insurance Regulatory and Development Authority of India (IRDAI) said that revisions to insurance regulations encompass several key aspects, such as streamlining capital requirements, implementing composite registration, introducing one-time registration for intermediaries, enabling insurers to offer value-added services, and allowing the sale of additional financial products.
“Proposals for amendments to insurance laws include rationalized capital requirements, composite registration, one-time registration for intermediaries, value-added services by insurers, and sale of other financial products,” Panda told Bloomberg via email.
According to the report, with insurance penetration standing at less than 5 per cent in India with a population of over 140 crores, it highlights substantial growth potential for investors.
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The government permits foreign investors to hold up to a 74 per cent stake in insurance companies, attracting global players like American International Group Inc. and Prudential Financial Inc., who have already established their presence in India through local partnerships, the report noted.
As per Panda's assessment, in the past year alone, four new firms have entered the Indian insurance sector, and additional companies are currently in different stages of enrollment, further indicating a favorable business environment.
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The assets under management of insurance companies in India have surpassed Rs 60 trillion ($731 billion), which is larger than the economies of several countries, including Poland and Sweden. Demonstrating impressive growth, the sector experienced a 13.7 per cent expansion in the fiscal year that concluded in March, the report said.
IRADI chief told Bloomberg, “The expanding middle class, young population, growing disposable incomes, and widespread usage of technology provide several prospects."
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