Government Forms Seven-Member Panel to Overhaul Insurance Act, 1938

ENA Economy 2025-02-20 16:20:35 New Delhi, Feb 20 (KNN) In a significant move towards reforming Indias insurance sector, the government has constituted a seven-member expert panel to review and propose amendments to the Insurance Act, 1938. Originally enacted during British India, the Insurance Act, 1938, serves as the foundational legal framework for the insurance sector, governing life, general, and health insurance policies while empowering the Insurance Regulatory and Development Authority of India (Irdai) to oversee its implementation. The governments renewed focus on reforms comes after Finance Minister Nirmala Sitharaman, in her FY26 Budget speech, proposed increasing the foreign direct investment (FDI) cap in the insurance sector from 74 per cent to 100 per cent. She emphasised safeguarding citizens' premium payments within India while aiming to boost sectoral growth. M Nagaraju, Secretary of Financial Services, revealed that internal consultations are complete and that the next step involves presenting the amendment bill in Parliament. The proposed reforms include composite licences, reduced solvency norms, changes in investment regulations, and provisions for captive licences. Additionally, a one-time registration for intermediaries and permissions for insurers to distribute other financial products are under consideration. The government had earlier mulled repealing the Insurance Act, citing its complexity due to multiple amendments over the decades. However, it now plans to streamline the Act through targeted amendments, aligning with its broader goal of replacing outdated pre-Independence laws with modern legislation. The panel includes industry veterans such as NS Kannan, former MD and CEO of ICICI Prudential Life Insurance; Girish Radhakrishnan, former CMD of United India Insurance; Rakesh Joshi, former member of Irdai; Saurabh Sinha, former executive director of RBI; Alok Misra, MD and CEO of MFIN; and legal expert L Vishwanathan. These reforms aim to simplify regulatory frameworks, attract foreign investment, and enhance insurance penetration across India. (KNN Bureau) 41150 https://knnindia.co.in/news/newsdetails/economy/government-forms-seven-member-panel-to-overhaul-insurance-act-1938 2025-02-20 16:20:35 knnindia.co.in Government Forms Seven-Member Panel to Overhaul Insurance Act, 1938