Government to Amend Insurance Act 1938: Paving Way for 'Insurance for All by 2047'

The government plans to introduce amendments to the Insurance Act, 1938, during the upcoming Budget session aiming for 'Insurance for All by 2047'. Key changes include composite licenses, differential capital, reduced solvency norms, and investment regulation adjustments. The proposal aims to enhance policyholders' interests, improve insurer operations, and foster economic growth.

In a significant policy move, the government is preparing to amend the Insurance Act, 1938, in the forthcoming Budget session to realize the goal of 'Insurance for All by 2047'. Sources indicated that the amendments will feature composite licenses, differential capital requirements, and easing of solvency norms.

This legislative shift aims to enable differentiated insurance companies, much like the banking sector's classification into universal, small finance, and payments banks. Composite licenses will permit life insurers to underwrite health or general insurance policies, enhancing operational flexibility.

The draft bill, pending Cabinet approval, intends to bolster policyholders' interests, improve returns, attract more players to spur economic growth, and create jobs. With current statistics showing 25 life and 32 general insurance companies in India, the reform could significantly disrupt the insurance landscape.

(With inputs from agencies.)