The Indian insurance industry has witnessed significant developments, investments, and regulatory changes over the past couple of years. Here is a roundup of some of the major updates and highlights from the sector.
New Products and Covers
Launch of Standard COVID-19 Health Policy
The Insurance Regulatory and Development Authority of India (IRDAI) mandated all health and general insurance companies to offer a standardized COVID-19 health policy from April 1, 2021. The benefit-based policy offers lumpsum payout on hospitalization due to COVID-19. This improves access and renewability of Corona Kavach and Corona Rakshak policies.
Introduction of Vector-borne Diseases Policy
To expand health protection, the General Insurance Council has designed a standard vector-borne diseases policy providing coverage against mosquito-borne diseases like malaria, dengue etc. Insurers can customize and launch this product.
Mental Illness Coverage
In a progressive regulatory move, IRDAI has directed health insurers to cover mental illness expenses including hospitalization under all retail policies from 2022-23. This expands coverage to include in-patient psychiatric treatment.
Digitization Initiatives
Mandate for Digilocker Integration
To enable easy, digital access of policies, IRDAI has directed life and general insurance companies to integrate their systems with Digilocker by March 2023. Policyholders can safely store their insurance policies in electronic form.
Pay-as-you-Drive Insurance
IRDAI has allowed general insurers to introduce voluntary PAYD motor policies with premiums based on actual distance usage measured via telematics devices. This facilitates more personalized, flexible pricing aligned to vehicle usage.
Regulatory Sandbox for Testing InsurTech
To boost digital innovation, IRDAI has opened up a regulatory sandbox allowing insurers to test new tech solutions like IoT, wearables, telematics etc. before mass launch. This promotes adoption of technology.
Boosting Insurance Penetration
Mandatory Motor Cover for Vehicle Rentals
From April 2022, annual motor insurance has been made mandatory for rented vehicles including cabs, taxis and buses. This aims to improve insurance compliance across vehicle rentals.
Removal of Minimum Life Cover Limit
The minimum life insurance cover limit of Rs 2.5 lakh for single premium policies has been removed. Insurers can now offer life covers of any amount for one-time lumpsum premium payment policies.
Mission COVID Suraksha Group Insurance
The public sector general insurers have jointly launched a COVID-specific hospitalization cover scheme offering Rs 5 lakh fixed benefit policy from Rs 344 premium. This improves access to COVID protection.
Increasing Foreign Investment
Hike in FDI limit
The government has increased the foreign direct investment (FDI) limit in the insurance sector from 49% to 74%. This reform aims to improve foreign capital inflow for expansion and growth of insurance companies.
Regulations for Insurance Intermediaries
Revised Regulations
IRDAI has revised regulations governing insurance agents, brokers, web aggregators etc. to strengthen competency, conduct and performance standards for better service delivery.
Simplified Claim Settlement Process
IRDAI has streamlined procedures and timelines for health insurance claims processing, settlement and disputes to enhance customers’ service experience through faster resolution.
New Investment Regulations
Relaxed Investment Norms for Insurers
IRDAI has allowed increased investment options for insurers by permitting higher exposure to equities, alternatives like REITs, InvITs etc. This provides investment flexibility and growth opportunities.
Shift to New Accounting Standard
IRDAI has transitioned insurance companies’ accounting practices from generally accepted accounting principles to new Indian accounting standards (Ind-AS). This aligns with global accounting standards.
The vibrant policy developments highlight the insurance sector’s strong growth potential driven by progressive regulations, digitalization and rising insurance demand in India.