13.10      ndian     onom
            for the purposes of business expansion           insurance agents to insurers and provides
            in the rural/social sectors and enhanced         for IRDAI to regulate their eligibility,
            competitiveness. The Government of               qualifications and other aspects—
            India ownership to be mainatained                (a) It enables agents to work more
            minimum at 51 per cent.                              broadly across companies in various
      (iii) Consumer Welfare: It will enable the                 business categories; with the safeguard
            interests of consumers to be better                  that conflict of interest would not be
            served through provisions like those                 allowed by IRDAI through suitable
            enabling penalties on intermediaries/                regulations.
            insurance companies for misconduct               (b) IRDAI is empowered to regulate
            and disallowing multi-level marketing of             key aspects of Insurance Company
            insurance products in order to curtail the           operations in areas like solvency,
            practice of mis-selling—                             investments,        expenses        and
            (a) The amended Law has several                      commissions and to formulate
                provisions for levying higher penalties          regulations for payment of commission
                ranging from up to Rs.1 crore to Rs. 25          and control of management expenses.
                crore for various violations including       (c) It empowers the Authority to regulate
                mis-selling and misrepresentation by             the functions, code of conduct, etc.,
                agents/insurance companies.                      of surveyors and loss assessors. It
            (b) With a view to serve the interest                also expands the scope of insurance
                of the policy holders better, the                intermediaries to include insurance
                period during which a policy can be              brokers,      re-insurance     brokers,
                repudiated on any ground, including              insurance consultants, corporate
                mis-statement of facts etc., will be             agents, third party administrators,
                confined to three years from the                 surveyors and loss assessors and such
                commencement of the policy and no                other entities, as may be notified by
                policy would be called in question on            the Authority from time to time.
                any ground after three years.                (d) Further, properties in India can now
            (c) The amendments provide for an                    be insured with a foreign insurer with
                easier process for payment to the                prior permission of IRDAI; which was
                nominee of the policyholder, as the              earlier to be done with the approval of
                insurer would be discharged of its               the Central Government.
                legal liabilities once the payment is    (v) Health Insurance: The Act defines ‘health
                made to the nominee.                         insurance business’ inclusive of travel and
            (d) It is now obligatory in the law for          personal accident cover and discourages
                insurance companies to underwrite            non-serious players by retaining capital
                third party motor vehicle insurance          requirements for health insurers at the
                as per IRDAI regulations. Rural and          level of Rs. 100 crore, thereby paving the
                social sector obligations for insurers       way for promotion of health insurance as
                are retained in the amended laws.            a separate vertical.
      (iv) Empowerment of IRDAI: The Act will           (vi) Promoting Reinsurance Business in
            entrust responsibility of appointing             India: It enables foreign reinsurers to