Irdai offers new insurance policies in “demat format” from December
In terms of first-year premium, all major private life insurers recorded year-over-year growth of more than 15% in August 22
One of the provisions being considered is lowering the minimum capital requirement by Rs 100 crore for starting an insurance business, the sources said.
The decision to relax the capital requirement would allow the entry of differentiated insurance companies as in the banking sector, which includes categories like universal banking, small corporate banking and payment banking.
With the ease of entry capital standards, there could be the entry of businesses focused on microinsurance, agricultural insurance or insurance companies with a regional approach, the sources said, according to the report.
Thus, for them, the solvency margin requirement would also be different but without compromising the interest of policyholders, the sources said. The entry of more players would not only boost penetration but lead to greater job creation in the country.
Last year, the government amended the Insurance Act to allow foreign ownership of insurers to increase from 49% to 74%.
Furthermore, Parliament passed the General Insurance Business (Nationalisation) Amendment Bill, 2021, allowing the central government to reduce the shareholding to less than 51% of the share capital of a specified insurer, paving the way for privatization.