With a view to provide wider choice and affordability to policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) in its 120th board meeting on Friday approved several proposals such as increasing the maximum number of tie-ups for corporate agents and insurance marketing firms . (IMF) to 9 (earlier 3) and 6 insurers (earlier 2 insurers) each, allowing direct investment by private equity funds in insurance companies, reducing promoter stake up to 26 per cent and allowing insurance companies to raise alternative investments such as subordinated debt Granting and preference shares without any prior approval.
Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance Company said, “These are path-breaking reforms that will improve the ease of doing business, liberate the distribution model, encourage customer-centric innovations and make the sector attractive for investment . The regulator has addressed several long pending issues of the industry in one fell swoop! The vision of the regulator to ensure insurance for all is truly inspiring and these reforms will go a long way in achieving that objective.
Experts say amendments in regulations to reduce promoter holding to 26 per cent and making the SPV mode optional for PE funds will lead to more money flowing into the sector.
Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance said, “IRDAI has been playing a pivotal role in aligning the industry to meet the needs of the evolving needs of India’s life insurance customers. Speed and transformational reforms being introduced, such as expansion of partnership options for corporate agents and IMFs, exemptions provided to incorporate new companies and attract further capital, are being designed for the benefit of customers There are some examples of changes, and the industry at large. We welcome these changes and remain engaged with the regulator’s agility in moving the industry forward.”
Welcoming the changes, industry veteran Kamesh Goyal, Chairman, Go Digit General Insurance, said, “The new proposals approved by IRDAI in the 120th Board Meeting are a historic moment and will certainly mark a new era for the insurance industry. Increasing the tie-up limit for corporate agents and insurance marketing firms for life, general and health insurers to nine and six insurers, respectively, will give policyholders a wider choice of choosing innovative products offered by insurers and the vision of the government and IRDAI Will get help. To accelerate insurance penetration in the country. ,