ns ran e in ndia 13.9
on various relevant issues in the sector.
new reform initiatives
The IRDA is also co-ordinating with
and supporting insurance industry With a view to removing archaic and redundant
initiatives in standardising certain key provisions in the insurance laws, empowering the
terminology used in health insurance Insurance Regulatory and Development Authority
documents, for better comprehension (IRDA) to enable more effective regulation, and
and in the interest of policyholders. The enhancing the foreign equity investment cap in an
General Insurance Council, comprising Indian insurance company with the safeguard of
Indian ownership and control, the government has
all non-life insurers, evolved a consensus
implemented the Insurance Laws (Ammendment)
on a uniform definition of ‘pre-existing
Act, 2015.
diseases’ and its exclusion wording, which
The Act paved the way for major reform
has earlier been an expression with many
related amendments in the Insurance Act, 1938,
definitions, still more interpretations,
the General Insurance Business (Nationalization)
and certainly a whole lot of grievances.
Act, 1972 and the Insurance Regulatory and
Such standardisation, effective 1 June, Development Authority (IRDA) Act, 1999. It
2008 will help the insured by minimising provides greater powers to the IRDAI by which
ambiguity and also by better comparability the insurance regulatory framework is supposed
of health insurance products. Also, with to become more flexibile, effective and efficient.
effect from 1 October, 2011, portability Major changes as per the Act are given below:
in health insurance has been started (i) Promotion of Foreign Investment: In an
in which an insured, if not happy with Indian Insurance Company increased
services or the product of the existing from to 49 per cent (from 26 per cent)
insurer, can change to another insurer with the safeguard of Indian ownership
whilst enjoying the benefits (especially and control.
that of pre-existing diseases) of her/his Greater availability of capital for the
existing policy. capital intensive insurance sector would
(ii) Micro Insurance: Micro insurance lead to greater distribution reach to
regulations issued by the IRDA have under/un-served areas, more innovative
product formulations to meet diverse
provided a fillip to propagating micro
insurance needs of citizens, efficient
insurance as a conceptual issue. With the
service delivery through improved
positive and facilitative approach adopted
distribution technology and enhanced
under the micro insurance regulations, it customer service standards.
is expected that all insurance companies
(ii) Capital Requirement in Government
would come out with a progressive
Companies: The public sector general
business approach and carry forward the insurance companies (four), presently
spirit of regulations thereby extending required as per the General Insurance
insurance penetration to all segments of Business (Nationalisation) Act, 1972 to
the society. Presently, there are 10,482 be 100 per cent government owned, are
micro–insurance agents operating in the now allowed to raise capital. This will
micro–insurance sector. enable them to have additional capital