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Informist, Monday, Apr. 7, 2025

 

By Priyasmita Dutta

 

NEW DELHI – The Department of Financial Services--which was working on the draft of the Bill--has already sent the Insurance Amendment Bill, 2024 for approval from the Union Cabinet, and once the Bill is cleared, it will likely be taken up for discussion and passing in the Monsoon Session of Parliament in Jul-Aug, according to senior finance ministry officials.

 

"We have already shared the draft with Cabinet last month," one of the officials cited above, said. The Insurance Amendment Bill, 2024, has many operational amendments, one of the key items being enabling the hike in foreign direct investment limit for the insurance sector to 100%--as proposed in the Budget for 2025-26 (Apr-Mar)--from the current 74%. Another important item in the Bill is the introduction of composite licences, which would allow insurers to offer all types of insurance products under one licence, streamlining the licensing process and enabling companies to expand their offerings.

 

The Bill also proposes agents to be allowed to sell products from multiple insurers, breaking away from the earlier exclusivity model, potentially leading to a more customer-centric approach and increased insurance penetration in rural and underserved areas.  

 

While the Bill has been in the works for a while and was widely expected to be taken up in the Budget session of Parliament, another official cited above said that there are many nuances in terms of operational changes suggested in the Bill and so formulating them requires extensive deliberation and discussion. 

 

Alongside the Insurance Amendment Bill, 2024, the government will also make amendments to the LIC Act and the IRDAI Act. Tweaks to the LIC Act will be made to empower the board to undertake operational decisions like office expansion, recruitment and hikes. On other hand, the IRDAI Act will be tweaked to enable the provision of composite licensing as well as the FDI limit.  End

 

Edited by Akul Nishant Akhoury

 

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