Page 17 - Insurance Times May 2024

"After the hardening last year, the IRDAI had set up a committee to
global reinsurance capacity increased simplify policy wordings last year. The Insurance reforms in
materially as favourable reinsurance IRDAI move came following complaints first 100 days' agenda
results and shifting economic factors that policyholders often find it difficult
gave tailwinds. This has led to to understand the terms and of BJP govt
dedicated reinsurance capital conditions in insurance policy contracts The Bharatiya Janata Party-led
bouncing back in 2023," said Nymphea due to the complex language used in government will introduce
Batra, chief executive of Guy the policy. amendments to existing insurance
Carpenter India, a unit of Marsh India Despite detariffing in all the segments legislation-the basis for rolling out
Brokers that handles reinsurance. of Indian general insurance industry in insurance reforms within 100 days
2006 in terms of pricing, except motor if voted back to power, two
Usually before renewals, general
insurers discuss with global markets to third party motor premium, the persons aware of the party's
get the trends. insurers didn't have the freedom in agenda said.
issuing customised policy wordings and
According to the feedback from had to follow a particular set of pre- Planned reforms in the insurance
January renewals, there was no determined format as far the wordings sector include a provision for a
softening of market rates with the including terms and conditions in the composite insurance licence,
rates being flat. Experts said reinsurers policy document are concerned. "The relaxed entry barriers for
led by GIC Re increased their Indian insurance market will be now companies, simplifying investment
capacities, further encouraging the aligned with leading global markets in rules and giving more powers to
rates to stabilise. freedom of pricing and preparing policy the regulator to determine the
documents," insurers said. licence fee structure for
Insurer, customers to companies.
LIC's total premium grows
benefit from change in According the one of the two
most among listed peers persons cited above, the finance
policy wordings in March ministry has finalized the draft
The decision of insurance regulator Insurance Laws (Amendment) Bill
State-owned Life Insurance
IRDAI to allow general insurers to Corporation of India (LIC) reported a and proposes to push it for cabinet
change the wordings in all corporate 26.41 per cent increase in the total and Parliamentary approval as
policy documents, except motor third premium collected in March 2024 to Rs soon as the new government
party, is expected to lead to a sea 36,300.62 crore compared to Rs comes to power at the Centre.
change in the way insurance policies 28,716.23 crore in the same month a This is expected to be pushed for
are issued, insurance officials said. year ago. implementation during the first
Insurers can now change terms, LIC was followed by SBI Life Insurance 100 days of the new government.
conditions, clauses, warranties, policy Company in premium collection growth Officials said the amendment bill is
and endorsement wordings applicable at 24.76 per cent. ICICI Prudential Life complete in all respects and would
to certain classes of business such as Insurance Company reported a 12.58 be implemented irrespective of
Fire, Engineering, Motor, Workmen's per cent growth. Another major insurer which party comes to power.
Compensation and other classes of HDFC Life Insurance Company,
insurances, which were not allowed however, reported a decline in premium The government is working on a
earlier, said a gazette notification collection at 20.05 per cent. 100-day post-election agenda as
issued by the government. As of March 2024, LIC commands a well as a vision document for
market share of 58.87 per cent based on transforming the country into a
The IRDAI decision is expected to premium collections, the state-owned
benefit the general insurance industry, insurer said quoting figures released by developed nation by 2047. Finance
India Inc in general and customers. minister Nirmala Sitharaman in
Life Insurance Council. Private insurers her budget speech said the
The latest decision would enable also experienced a surge in premium government will take up next-
customisation of the policy wordings in collection in March due to a last-minute generation reforms to push growth
accordance with the risk profile, rush by customers to avail of tax and development in the next five
encourage product innovation and exemptions before the April 1 deadline years.
meet the larger customer needs. for non-linked policies, it said.

16 May 2024 The Insurance Times