New Insurance Policy: The Indian government is set to bring about a major transformation in the country’s insurance sector. Recently, the Union Cabinet approved an amendment bill titled “Insurance for All, Security for All.” This bill will introduce significant reforms to insurance laws that are nearly 100 years old. Union Finance Minister Nirmala Sitharaman is expected to introduce it in Parliament soon.
Permission for up to 100% Foreign Investment
This new bill proposes increasing the limit for Foreign Direct Investment (FDI) in insurance companies from 74% to 100%. If this becomes law, foreign companies will be able to invest with full ownership in India’s insurance sector. This is expected to increase competition in the market and lead to better services for customers.
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Affordable and Better Insurance Policies
The increase in the FDI limit will attract more foreign insurance companies to the country. This will intensify competition among companies, potentially leading to lower premium rates. This means customers will be able to get good and beneficial insurance policies at lower prices.
New and Modern Insurance Plans
When international insurance companies enter India, they will also bring new insurance products that meet global standards. These will include cyber insurance, pet insurance, micro-insurance, and customized policies tailored to specific needs. This will provide people with protection against new types of risks.
Faster Claim Settlement
With increased competition, companies will focus not only on offering cheaper premiums but also on providing better service. This will make filing claims easier, and the process of investigation and payment will be faster than before.
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More Power to LIC and IRDAI
The bill also proposes giving more autonomy to LIC (Life Insurance Corporation of India). Currently, due to the government’s large stake, there is government interference in many of LIC’s decisions. After the new law, LIC will be more capable of making its own decisions. Along with this, IRDAI, the insurance regulatory body, will also be given more powers, enabling it to better monitor the insurance sector.