Page 27 - India Insurance Report 2023- BIMTECH

India Insurance Report - Series II 15

m. Penalties: Section 102 (91), 104 (92), 105 (93), 105 B&C (94)

The Upper limits of the maximum penalties have been raised to new levels. To cite an example: up
to 250 million in case of violation of the provisions relating to Investments (Section 27). This amounts to
25% of the capital prescribed for general insurance companies. These issues must again be left to the
discretion of the Regulator and be part of the secondary legislation, as there is more than one way to
discipline an errant player.

n. Clause 76(2) - 64F, Para 2

The Insurance (Amendment) Act, 2015 recommends as under:

“The Executive Committee of the General Insurance Council shall consist of the following persons, namely:

a) Four representatives of members of the General Insurance Council elected in their individual capacity
by the members in such manner as may be laid down in the bye-laws of the Council;

b) An eminent person not connected with the insurance business, nominated by the Authority; and

c) Four persons to represent insurance agents, third party administrators, surveyors, loss assessors and
policy-holders respectively, as may be nominated by the Authority:

Provided that one of the representatives as mentioned in clause (a) shall be elected as the Chairperson
of the Executive Committee of the General Insurance Council. 4 members of the Council elected in
their individual capacity, and 1 person not connected with general insurance business nominated by the
Authority and 4 persons to represent Agents, TPAs, Surveyors and Policyholders - TOTAL 9"

It is important that General Insurance Council be left to be a Self-Regulatory Organization for the
insurers, of the insurers and by the insurers.

o. Access to Mutual/Cooperative Insurance

According to research from the International Cooperative and Mutual Insurance Federation (ICMIF),
the countries where there is no mutual/cooperative insurance law represent 9% of the world’s Gross
Domestic Product (GDP). More than 950 million people worldwide are served by mutual or cooperative
insurers. It is the fastest growing part of the insurance sector but domestic legislation and regulation
must be brought up to the highest standards to ensure that the existing and potential mutual and
cooperative insurance customers are not disadvantaged. The research also suggests that it is people in
low-income countries around the world that have the least access to mutual/cooperative insurance, as
63% of low-income countries have no mutual/cooperative law to write insurance.

It is felt that the cooperative and mutual insurance business model is not sufficiently understood by
policymakers, regulators or commentators in India: