Page 40 - Insurance Times March 2023

unique opportunities offered by each state. A joint effort from the eligibility criteria for different classes and sub-classes of
insurance companies, state authorities and direct business, the regulator may register the applicant as an
participation of officials from IRDAI is envisaged to drive the insurer and grant it a certificate of registration for such classes
agenda of the plan. State specific insurance profiles based on or sub-classes. With composite licence arrangement, insurers
a proposed set of parameters may help bridge the gap will now have more flexibility in operating in multiple lines of
between the insured and uninsured population while insurance business, without having a separate insurance
improving the overall quality of insurance services offered. company to sell life, general, and health business.
All the stakeholders involved in this proposed approach are
envisaged to have vital roles to bring about effective Revising the Capital requirements for Insurers: The rigid
implementation of the plan. requirements of capital for setting up an insurance company
is of Rs 100 crore is required for setting up a life, general, or
The approach may be implemented in phases starting with health insurance business and for reinsurance it is Rs 200
creation of individual state insurance profiles and developing crore. Now very soon the insurance company be allowed to
an insurance inclusion plan in accordance to the profile. Each commence business with a minimum paid up equity capital
state/ region of India offers a unique set of opportunities as as may be specified by regulations, considering the size and
well as poses certain challenges when it comes to insurance scale of operations, class or sub-class of insurance business,
inclusion. The intent of this initiative is to have a focused and the category or type of insurer.
approach towards tapping into those opportunities and
addressing the underlying challenges. Each Insurer is allocated The concept of Captive Insurers: The captive insurer is an
with a specific state or Union territory to nurture and expand insurance company that is owned by the insured itself. In India,
the insurance penetration and deliver the insurance products like large corporations and cooperatives, the government too
to the last mile individual. can benefit from the use of insurance captives for public
programmes like the Pradhan Mantri Fasal Bima Yojana
The Changes which are on the cards: (PMFBY) and Pradhan Mantri Jan Arogya Yojana (PMJAY). The
captives have tremendous growth potential if they register
Tax Incentives for Insurance products: All financial
within low-tax jurisdictions such as the GIFT City (Gujarat
purchases are currently clubbed under the same IT deduction
International Finance Tec-City). Given its tax incentives, GIFT
section (80C), capped at Rs 1,50,000. It is expected that
City can emerge as a hub for captives for the entire Indian
creating a separate section for a tax deduction on premiums
subcontinent. The introduction of the insurance captive concept
paid towards life and health insurance will further help in
is a winning proposition as it widens the choices for insureds
boasting up the insurance sector of the country. This will
providing greater flexibility and coverage for nicherisks and
effectively segregate customers' funds into long-term and
also has the potential to revamp the implementation of self-
short-term kitties. Considering the low single-digit penetration
insured government welfare schemes. The captive insurance
of life and Non-life insurance in India, tax incentives can be
industry emerged to address deficiencies and inefficiencies of
expected to focus on first-time life insurers and the principal
traditional pooled insurance programs.
component of annuity income. Special incentives may also
be announced for women who currently account for barely
more than one-third of the country's life insurance covers. Conclusions:
The General or NonLife insurance industry has undergone
GST rate relaxation: GST rate relaxation from the current numerous transformations in terms of new developments,
rate of 18 per cent on all insurance products may also help modified regulations, proposals for amendments and growth.
make it more affordable for the masses, who are keen on The mission of the Regulator 'Insurance for All by 2047' is
buying protection-oriented products like life insurance, health very aggressive and the same seems visible in all the attempts
insurance and the allied. which the Regulator is taking in the present days. The
Insurance sector is embracing cutting-edge technologies such
Composite Licence for Insurers: The Regulator is set in all as machine learning in the automation of claim management,
moods for granting of composite licences to the Insurers of personalized insurance pricing with the Internet of Things,
the country. This move will help the Insurers to sell different and Telematics for Motor insurance. The initiative of Bima
financial products including mutual funds which in other words Bharosa and Bima Sugam is a very path breaking attempt by
can be cited as the Insures are allowed to operate in multi the Regulator which will boast the ultimate aim of Insurance
lines like General, Life and Health lines. If an applicant meets penetration and Insurance for All.

34 March 2023 The Insurance Times