Page 12 - Insurance Times March 2024

IRDAI plans changes in IRDAI proposes obligatory 10,000 vehicles in each category,
whichever is higher," the draft norms
rural, social norms life, health coverage in said.
The Insurance Regulatory and De- gram panchayats across
velopment Authority of India India Insurers may not need
(IRDAI) is planning to change norms Insurance regulator IRDAI has pro- prior approval from IRDAI
on rural, social sector and motor
posed to make insurance coverage, in-
third party obligations for the in- for listing shares
cluding life, health and motor, obliga-
surers. tory on the part of insurance compa- The Insurance Regulatory and Devel-
In an Exposure Draft on IRDAI (Ru- nies in gram panchayats across the opment Authority of India (IRDAI) is
ral, Social Sector and Motor Third country in order to achieve the objec- proposing to remove the requirement
Party Obligations) Regulations, tive of "insurance for all". for prior approval for listing of shares of
2024, the insurance regulator pro- The minimum number of lives to be cov- insurers on stock exchanges, subject to
posed to keep gram panchayat as ered by all life insurers in all gram compliance of specified conditions.
the unit for measurement of rural panchayats in the country should be 30 In an exposure draft of IRDAI (Regis-
sector obligations. per cent in each gram panchayat sub- tration, Capital Structure, Transfer of

For life insurers, number of lives ject to a minimum of 25,000 gram Shares and Amalgamation of Indian In-
under individual policies and under panchayats as driven by lead insurer in surance Companies) Regulations, 2024,
group policies will be considered the first year, IRDAI has proposed. This the insurance regulator proposed ma-
jor changes including removal of re-
while for general insurers, number increases to 40 per cent lives subject to quirement of prior approval of the
of individual dwellings under fire a minimum 50,000 gram panchayats IRDAI for listing of shares of insurers on
segment and number of vehicles and 50 per cent lives subject to a mini-
mum of 75,000 gram panchayats in stock exchanges subject to compliance
under motor insurance segment
year 2 and 3 respectively, IRDAI said in of specified conditions and provision for
will be counted
its draft Rural, Social Sector and Motor relaxation of lock in period in case the
As per the proposed norms, the mini- Third Party Obligations Regulations, insurer or the shareholder is in financial
mum number of lives to be covered 2024. distress or to facilitate amalgamation
by all life insurers in all gram of insurers or shareholders.
The same formula will be applicable in
panchayats in the country shall be The proposed regulations also intend to
30 per cent in each gram panchayat, the case of dwellings under fire insur-
ance, motor (comprehensive and third provide more clarity on the capital
subject to a minimum of 25,000 party) and lives under health and per- structure of the applicants seeking new
gram panchayats as driven by the sonal accident insurance. registration and applicability of require-
lead insurer in the first year. ment of prior approval for transfer of
Over 40 crore people still don't have
This increases to 40 per cent lives, health insurance coverage in India. On shares.
subject to a minimum 50,000 gram motor third party insurance, the obli- The regulator has invited views of vari-
panchayats and 50 per cent lives,
gations are specified for goods carrying ous stakeholders and the general pub-
subject to a minimum of 75,000 and passenger carrying vehicles as lic on the proposed changes which can
gram panchayats in year 2 and 3 nearly 50 per cent of the vehicles in be sent on or before 23 February 23,
respectively. these 2 categories are uninsured. 2024 to the regulator, according to a
For general Insurance, the minimum These vehicles are important segments circular.
number of dwellings under fire in- of the motor insurance business and "As part of the comprehensive review
surance and vehicles under Motor widely exposed to third party claims. of regulations being undertaken by the
(Comprehensive and TP) to be cov- "Every general insurer is therefore re- IRDAI to enhance the ease of doing
ered by all general insurers in all quired to underwrite at least 20 per business and also reduce compliance
gram panchayats in the country will cent increase over total number of burden for stakeholders while also en-
be 30 per cent in each gram goods carrying and passenger carrying suring that interests of policyholders
panchayat, subject to a minimum of vehicles as compared to what was cov- continue to be protected, insurance
25,000 gram panchayats as driven ered in the last financial year or 20,000 councils were asked to submit their rec-
by lead insurer in the first year. vehicles under these categories or ommendations,'' the regulator said.

12 March 2024 The Insurance Times