New laws to usher in insurance reforms
NEW DELHI : The government plans to introduce legislation during Parliament’s monsoon session to implement comprehensive reforms, including provisions for a composite insurance licence, relaxed entry barriers for companies, and simplified investment rules, in the insurance sector, two people aware of the development said. In the monsoon session starting 20 July, the Centre is expected to introduce two pieces of legislation—the Insurance Laws (Amendment) Bill, 2023, and the Insurance Bill, 2023, the people said on condition of anonymity.
The first legislation would be aimed at reforms to boost insurance penetration, improve efficiency, and enable product innovations. The Insurance Bill, 2023, on the other hand, is being drafted to simplify and update the legal framework governing the sector.
It entails the repeal and re-enactment of the Insurance Act, 1938, aiming to simplify pre-constitutional enactments by renumbering and eliminating obsolete British-era provisions. “The draft of the Insurance Laws (Amendment) Bill, 2023, has already been sent to the Union cabinet for approval before it is introduced in Parliament.
The draft Insurance Bill, 2023, is being finalized, and stakeholder consultation is being completed so that this Bill could also be placed in the coming session. If the Bills secure parliamentary approval this year, some of the newer provisions, including changed licensing norms, could be made operational later this year or early FY25," one of the two people cited earlier said.
While queries sent to the finance ministry’s spokesperson remained unanswered, a government official said the insurance sector reforms were a priority and that progressive legislation would be introduced. The draft Insurance Laws
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