IRDAI also gave final approval GoDigit General Insurance In-principle approval for listing of the company and also to IndiaFirst Life Insurance Company. has also approved the merger of exide life with HDFC Life,
The regulator said the objective of these changes was to facilitate policyholders, insurers and distributors to have ‘insurance for all by 2047’.
IRDAI allowed private companies to invest directly in insurance companies while investing through a Special Purpose Vehicle (SPV) optional. Investors can now take up to 25% stake in insurance companies without being designated as promoters. Promoters of listed companies have been allowed to reduce their stake in insurance companies to 26%, provided they have a satisfactory solvency record for the last 5 years.
Also a significant consumer facing banks and other corporate agents can tie up with the earlier three insurers with nine insurers, while insurance brokers may tie up with the earlier two insurers with six insurers in each line of business of life, general and health. can combine with.
IRDAI said that the rules were changed after taking into account the comments of the stakeholders and the views of the Insurance Advisory Committee.
Solvency norms have been eased for both general and life insurance companies, general insurers have now been asked to maintain solvency of 0.70% to 0.50% on crop insurance and time to consider premium due to state and central government The limit has been increased from 180 days to 365 days. Which will lead to a capital infusion of Rs 1460 crore for general insurers.
For unit linked plans of life insurers, the solvency ratio has been reduced from 0.80% to 0.60% while for Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) it has been reduced from 0.10% to 0.05%. This will reduce the capital requirement for life insurance companies by about Rs 2,000 crore.
Insurers who were waiting for these reform measures by the regulator welcomed the move.
“These are path-breaking reforms that will improve the ease of doing business, free up the distribution model, encourage customer-centric innovations and make the sector attractive for investment. The regulator has addressed several pending issues of the industry in one stroke has done,” said Bhargav Dasgupta, CEO ICICI Lombard general insurance company
Companies can now raise capital through subordinated debt or preference shares without prior approval of IRDAI. The limit for raising such capital has also been raised to 50% of the paid-up capital plus premium.
The regulator has also given new provisions to actuaries to identify, monitor, report and recommend action for risks affecting the solvency position of companies.
“We believe that registration of Indian insurers and other forms of capital offers should lead to better access to capital for the industry, which will drive insurance penetration. We welcome changes in the regulatory sandbox framework in the form of extending the experiment period from 6 We do. Ritesh Kumar, CEO HDFC consequently general Insurance Told.
Regulatory Sandbox provides a testing environment to companies in innovative products, technologies in a controlled regulatory setting. The period of experiment has been increased from 6 months to 36 months.
In its board meeting, the regulator gave final approval to Go Digit General Insurance Company and in-principle approval to IndiaFirst Life Insurance Company for listing on the stock exchanges.
The acquisition of Exide Life Insurance by HDFC Life was also approved and the registration of Kshama General Insurance Company was also approved. IRDAI said nineteen more applications are in the pipeline at various stages, of which one is expected to be approved in the next meeting.
Other reforms include replacing various sectional caps on management expenses with a single overall cap in general and health insurance. For life insurance, it is proposed to raise the sectoral limit of expenditure for certain segments, with overall regulatory oversight at the company level.
It is proposed to link the commissions to the overall ceiling of expenditure of the management. “This will help insurers to incentivize intermediaries to match their solicitation efforts and design commission structures to make insurance more affordable,” IRDAI said.