The insurance industry in India is being presently regulated and developed by an autonomous organization called the Insurance Regulatory and Development Authority of India (IRDAI), which has been implementing various measures to escalate insurance density across the nation. Speaking to the media on Thursday, IRDAI Chairman Debasish Panda said that the authority is also formulating the proposition to prepare a state insurance plan like the SLBC. This is to pool all district-level potential targets to develop state-wise insurance plans towards achieving the goal of insurance for all by 2047.
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What is the State Insurance Plan and How it will Function?
There is a proposal to develop state insurance for different states and this would mean that the state insurance plan is particularly aimed at filling gaps in protection and this can only be done through the cooperation of the state government. Such a partnership will guarantee that every state’s need will be addressed, and Insurance is extended to other areas. To achieve this goal, this plan replicates the SLBC framework that maintains state-wise integration of banking development and brings about similar strategic coordination and efficiency to the insurance sector.
In what ways is the State Level Bankers’ Committee (SLBC) a Model for the Insurance Plan?
The SLBC is an important organisation at the state level which helps in aligning every government with the banks. Priority markets of specific importance include financial inclusion as well as the priority sector, concerning which the policy lays much emphasis on the successful implementation of development programmes. Applying the SLBC as the model, the IRDAI wants to duplicate this successful model to increase insurance density in the country.
Legal Changes in and Development of the Insurance Market
Besides the state insurance plan, the IRDAI is trying its best to liberalize rules and reform the insurance sector. Speaking to his fellow members of the committee, Chairman Panda urged his colleagues to adopt streamlined laws to spur the development of the insurance market. So far, IRDAI has withdrawn 97 circulars and has pruned over 79 returns simplifying the environment for insurers to conduct their business and constantly innovate.
India Increases Efforts in Its Quest for Reinsurance Market
Panda also focused on IRDAI’s action in making India the reinsurance centre of the world. The regulator endeavours to develop the proper reinsurance structure, and the proposed GIFT International Finance Service Centre at Gandhinagar forms part of this structure. This measure is part of a larger plan to pick up India’s standing in the sphere of insurance.
The Arrival of the United Payments Interface-like Revolution in Insurance
To transform the insurance industry, the IRDAI is now engaging with the Life and the General Insurance Council to develop a mechanism along the lines of the Unified Payments Interface. This insurance framework, known as the Bima trinity, which includes Bima Sugam, Bima Vistar, and Bima Vahak, special focus on the woman, is expected to lead to easier insurance shopping for consumers.
Amendment of Certain Provision of Insurance Act
The government is also thinking about changes in the Insurance Act for new participants such as micro, regional, captive, specialised and composite licences. This change should increase the level of competition within the INSURANCE industry and improve the services for the buyers.
Dealing with Issues on Surety Bonds
IRDAI is also concentrating on issues of the Surety Bonds. The single most important modification that has recently been made is the cancellation of an extra tier of solvency regulation which was deemed to as a hindrance towards the growth of this market. Panda was confident that the regulator is willing to entertain other ideas for the development of the surety bond market, and in extension, the infrastructure sector in India.
