New Delhi: The parliamentary standing committee on finance has endorsed significant reforms proposed in the Insurance Amendment Bill, including the issuance of composite insurance licenses and a reduction in capital requirements. The committee has urged the Ministry of Finance to expedite the implementation of these measures to modernize the insurance sector.
In a recent report, the committee highlighted the Insurance Regulatory and Development Authority of India’s (IRDAI) proposed amendments to the Insurance Act, 1938. These include provisions for composite insurance businesses, allowing insurers to offer both life and non-life products. The committee emphasized the need for quick action to enable insurers to diversify their offerings effectively.
The Centre has also drafted a bill seeking amendments to the Insurance Act, which includes increasing the foreign investment limit in the sector from 74% to 100%. This proposal is aimed at attracting greater capital and fostering competition within the industry.
Addressing concerns about Goods and Services Tax (GST) on health and microinsurance products, the committee acknowledged IRDAI’s support for reducing GST rates on these products. The Department of Financial Services has also backed this recommendation. The committee urged the finance ministry to coordinate and expedite a decision on this matter.
Regarding the financial health of four public sector general insurers, the committee has recommended a strategic roadmap to improve their competitiveness. It stressed the need for measures to attract sufficient capital and talent, ensuring their long-term viability and growth.
Separately, the committee has called for the establishment of a Cyber Security Protection Authority to oversee and regulate cyber security measures across sectors. Modeled on the Directorate General of Civil Aviation (DGCA) in the aviation sector, the proposed authority would provide centralized oversight to address growing cyber threats.
The committee’s recommendations underscore the urgent need for legislative and strategic reforms to strengthen key sectors, from insurance to cybersecurity, while prioritizing efficiency and public interest.
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