The Bill seeks to amend the Insurance Act 1938, the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999.
- The bill is aimed at accelerating the growth and development of the insurance sector and ensuring better protection of policyholders.
Key Features of the Bill
- 100% Foreign Direct Investment (FDI): Increases the Foreign Direct Investment (FDI) limit in Indian Insurance companies from 74% to 100% of the paid-up equity capital.
- Paid-up capital refers to the equity capital that has been fully paid by shareholders in exchange for ownership interests.
- Establishment of the Policyholders’ Education and Protection Fund: The Fund will be utilised to protect the interests of policyholders and educate them.
- The fund will be administered by IRDAI.
- Net-owned fund requirements for foreign re-insurers lowered: The Net Owned Funds requirement reduced from Rs 5,000 crore to Rs 1,000 crore, encouraging more re-insurers to enter the market.
- Other:
- The Insurance Regulatory and Development Authority of India (IRDAI) will have enhanced enforcement powers, similar to SEBI, to recover wrongful gains.
- Life Insurance Corporation of India (LIC) will have greater operational freedom, including setting up new zonal offices without prior government approval.