The Insurance Amendment Bill is expected to be the most significant regulatory reform in India’s insurance sector. The proposed changes will have far-reaching implications for insurers, agents, and investors, shaping the industry’s future landscape.
To facilitate the regulatory transition, the IRDAI has formed a high-level committee under the leadership of former State Bank of India (SBI) Chairperson Dinesh Khara. The committee comprises representatives from the life and general insurance sectors, legal experts, and banking professionals. Its primary role is to draft regulations for the proposed amendments.
The committee will not recommend modifications to the amendments put forward by the Department of Financial Services. Instead, its focus is solely on creating operational guidelines and ensuring that the new regulations align with the broader objectives of the reform.
Sources indicate that the government is expected to table the Insurance Amendment Bill within the next two sessions of Parliament. The IRDAI aims to be fully prepared with draft regulations by the time the bill is enacted to avoid any delays in implementation.
Among the major changes proposed in the bill, the five most critical amendments include:
- 100% Foreign Direct Investment (FDI) in Insurance
- Composite Insurance License
- Open Architecture for Insurance Agents
- IRDAI’s Authority on Investment Regulations
- Mergers with Non-Insurance Firms
IRDAI is working on setting clear compliance guidelines, operational limitations, and best practices for the industry. The objective is to provide a well-defined regulatory framework that balances innovation, competition, and policyholder protection.
