Page 9 - The Insurance Times December 2024

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growing needs of the Indian popula-
IRDAI Calls for More Players in the Insurance Sector tion.
IRDAI Chairman Debasish Panda has called for more conglomerates to en-
ter the insurance space, emphasizing the immense opportunities offered IRDAI Highlights High
by India's vast population of 1.4 billion. Panda urged private equity funds,
institutional investors, venture capitalists, and family offices to explore the Commissions in Motor In-
insurance market, highlighting that the current 70 insurers in the country surance
are insufficient to meet growing demands.
During a meeting with non-life insur-
Speaking at a CII event, Panda explained that IRDAI has simplified entry
ers, IRDAI raised concerns over the
procedures, removed barriers, and reduced approval timelines for floating high commissions paid to motor insur-
an insurance company. He added that the regulator has conducted ance service providers (MISPs). These
roadshows in Japan, Europe, and the US to attract global investors and in- commissions for new private car insur-
surers. Panda also stressed the importance of public listing for existing com- ance policies reportedly range from
panies, noting that IPOs promote transparency and add value for policy- 25% to 57%. The regulator noted that
holders and investors. Several companies are currently preparing for public
offerings, underscoring the regulator's push for a more open and investor- these high commission payouts have
friendly insurance landscape. become a burden for policyholders,
who often end up paying inflated pre-
miums.
Finance Ministry Proposes public feedback on these proposals by IRDAI pointed to the forthcoming
December 10.
100% FDI and Composite Bima Sugam platform, set to launch in
This initiative marks the second round April 2025, as a solution. This digital
Licences in Insurance of public consultations regarding the marketplace will enable customers to
The Finance Ministry has proposed Insurance Act, 1938, Life Insurance compare policies across insurers, fos-
sweeping amendments to the Insur- Corporation Act, 1956, and Insurance tering competition and transparency.
ance Act, 1938, which aim to further Regulatory and Development Author- The regulator also highlighted mal-
liberalize the insurance sector in India. ity Act, 1999. practice complaints involving MISPs,
These amendments include increasing If implemented, the increase in FDI will including reports of coercing custom-
the foreign direct investment (FDI) facilitate full foreign ownership of In- ers into buying specific policies and
limit in insurance from 74% to 100%, dian insurance firms, fostering greater conditioning vehicle purchases on insur-
reducing paid-up capital requirements, investment and accelerating sectoral ance sales. Past regulatory actions in-
and allowing composite licences that growth. These reforms are expected to clude penalties on entities such as
enable insurers to offer both life and make India's insurance industry more Maruti Insurance Broking and Hero
non-life products. The Department of competitive globally while enhancing Insurance Broking for violating MISP
Financial Services (DFS) has invited its financial capacity to cater to the guidelines.

The Insurance Times December 2024 9