Page 17 - The Insurance Times April 2025

Development Authority of India (IRDAI) approached IRDAI through the life departments are finalising the
and sought an extension in Insurance Council. They seek an Insurance (Amendment) Bill 2025,
implementing its new payment extension but have not specified any which is likely to be introduced in the
mechanism Bima-ASBA (Applications timeline. The insurance companies are second leg of the Budget session
Supported by Blocked Amount), which hopeful that the regulator will give commencing from March 10.
aims to simplify and streamline the them additional time to implement the
Finance Minister Nirmala Sitharaman
payment process for health and life feature.
had in her recent Budget speech
insurance policies, said multiple announced the decision to hike FDI
sources aware of the development. Policy safeguards needed limit in insurance sector to 100 per
In mid-February, IRDAI introduced the along with FDI hike in cent from current 74 per cent.
Bima-ASBA facility and mandated However, this enhanced limit will only
insurers to offer this facility, which will insurance: CEA apply to companies that invest the
enhance convenience and reduce India should consider incremental entire premium within India. She had
payment-related delays, to the policy safeguards along with the also announced that the current
policyholders by March 1. A majority of proposed foreign direct investment guardrails and conditionalities
insurers have yet to go live with this (FDI) hike implementation in the associated with foreign investment will
feature. insurance sector, Chief Economic be reviewed and simplified.
Advisor V Anantha Nageswaran has
The companies have initiated Some of the new guardrails now being
discussions with the UPI facility suggested. discussed among policy makers include
providers to implement Bima-Asba. This is required so that the increased allowing foreign nationals to occupy
They are working towards rolling out FDI benefits are also available to both senior managerial positions, but with
the feature soon, sources said, adding the consumer and the country, he said a rider that they must reside in India
that the regulator's March 1 deadline at a post Budget webinar organised by for better control and accountability.
was too early and prevented most Department of Financial Services (DFS). Another condition being contemplated
insurers from meeting it. Nageswaran's remarks are significant is to stipulate a tenure for specified
The insurance companies have as the DFS and other government minimum investment coming through
FDI route so that fly-by-night
companies are discouraged, sources
Life insurers' new premiums drop 11.6% said. The government is also keen that

Life-insurance companies in February reported an 11.6 per cent year-on- FDI comes through known source of
year (Y-o-Y) drop in new business premium (NBP) owing to relatively weak funds and identifiable promoter/brand,
performance by state-owned Life Insurance Corporation (LIC), which it is learnt.
reported a 22 per cent drop in premium. Since 2000, when insurance sector was
The data from the Life Insurance Council shows the NBP of life-insurance opened up, the total FDI flows in this
companies was Rs. 29,985.5 crore in February as against Rs. 33,913.18 crore sector so far stood at Rs. 82,847 crore.
in the same month last year. India's insurance penetration is just 3.7
per cent as against a global average of
LIC's premium dropped to Rs. 15,513.95 crore while private companies
7 per cent.
reported 3.24 per cent growth to Rs. 14,471.62 crore.
India is looking to have a fully insured
"Private life insurers have readjusted themselves to new surrender value
norms. But, the individual non-single premiums of LIC have dropped and the society by 2047 along with its Viksit
Bharat (developed nation status) goal
number of policies sold has also reduced, hinting that the revised commission
structures of agents are affecting the sale of policies and premiums," an by that year when the country
insurance-sector analyst said. celebrates hundred years of
independence.
NBP is the premium collected by life insurers from new policies for a
particular year. It is the sum of the first year premium and single premium, Allowing 100 per cent FDI in insurance
reflecting the premium from new businesses. sector is expected to unlock potential
of this industry, surpass global growth
Among large private players, the premium of the largest private life insurer, trends. Besides improving insurance
SBI Life, dropped 18 per cent. penetration nationwide, it is also

16 April 2025 The Insurance Times