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Informist, Friday, Nov. 8, 2024

 

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--'One size fits all' can't work, need multiple insurance pdts 
--Don't want to micromanage product pricing, mkt should decide 
--Bima Sugam platform will be game changer for insurance sector 
--To hold 'Bima Manthan' meeting with stakeholders next week 
--Need thrice the current number of insurance distribution agents 
--Processing one application for domestic re-insurer 
--Creation of re-insurance sector a priority 
--Looking for cross-border re-insurers 
--Govt mulling PM insurance plan distribution via insurance cos 
--Made recommendations to govt for composite insurance licence

 

MUMBAI – The Insurance and Regulatory Development Authority of India has made suggestions to the government to consider a composite licence for insurance companies to enable them to sell different types of products under one roof, Chairman Debashish Panda said at the Business Standard BFSI Summit on Friday. "For composite insurance, there is a need for amendment in the Act,...the government of India has taken up recommendations that we have made, and composite licence is one of them," Panda said. 

 

A composite licence would allow an insurance company to provide multiple types of products, such as life, general, or health, under one roof. When asked about the timing of the amendment and if it can be expected in the Winter Session of the parliament, Panda said that the decision for that lies with the government. 

 

Panda also spoke on the talks around allowing 100% foreign direct investment in the insurance sector. "When we are talking of insurance for all by 2047, we need a lot of capital which means we need a lot of new entities to come in. If the FDI route is also open that will augment to the domestic investment as well," Panda said. It's time to open up for 100?I, Panda said. Currently, India allows 74?I in the sector.

 

Talking about the insurance sector in India and how the country can move towards the goal of having every citizen insured by 2047 for a 'Viksit Bharat', Panda said that companies need to come up with a host of new and innovative products that can attract customers. The one-size-fits-all model cannot work in India, Panda said. However, the regulator does not want to micromanage insurance products and their pricing and wants to leave the decision to companies, he said. 

 

Regarding the Bima Sugam platform, Panda said it will be a game changer for the insurance sector, along with data and digitisaton. Bima Sugam is an electronic insurance marketplace or digital public infrastructure for all insurance stakeholders to facilitate the purchase, sale, servicing of insurance policies, settlement of insurance claims, grievance redressal, and other related matters. 

 

"It will help customers in exercising their choice, distributors will benefit immensely because they are able to complete a transaction at a much lesser cost and time...because they are going with a marketplace to the doorsteps of the customer," Panda said. Panda said there was a need for thrice the current number of insurance distribution agents and with the implementation of Bima Sugam "the distributors will become much more efficient, their opportunities and income will grow...the base will get expanded and more agents will get jobs."

 

In October, Panda had said its implementation was at advanced stages and the first phase will be launched soon. He also said the company behind Bima Sugam has been formally registered and a new chief executive officer has been appointed. He said that the appointments of other key management personnel are also at an advanced stage and soon, the entire leadership team will be in place.

 

Talking about the need for a reinsurance sector in India, Panda said that the creation of the sector remains a priority for IRDAI. He said one company's application is already in process with the regulator. IRDAI is also looking for cross-border insurers, Panda said. "We are opening the doors for domestic re-insurers, we already have one application which is under process...we are also looking at big companies which are already in the primary insurance space to get into re-insurance," he said.

 

The regulator is going to hold 'Bima Manthan' next week, a meeting with all the stakeholders of the insurance sector, Panda informed the summit.

 

Panda also spoke about the Pradhan Mantri Jeevan Jyoti Bima Yojana, an insurance scheme, which currently can only be distributed by banks. The government is now considering allowing insurance companies to distribute the plan as well, Panda said. The insurance plan offers one-year term life cover of INR 200,000 to all the subscribers in the age group of 18-50 years. It covers death due to any reason. Premium payable is INR 436 per annum per subscriber.  End

 

Reported by Kabir Sharma and Ashna Mariam George

Edited by Akul Nishant Akhoury

 

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