The insurance regulator is planning to create a framework to enable new entities to enter the insurance market in India with special outreach to global investors for enhancing foreign direct investment (FDI) into the country.
The Insurance Regulatory and Development Authority of India (Irdai) is reviewing the Rs 100 crore capital, which is the minimum requirement for any new player to begin an insurance venture. “We are thinking of allowing micro insurance player with Rs 10 crore or Rs 15 crore capital which can work in focus areas like a district,” Irdai Chairman Debasish Panda said in his first interaction with media here on Thursday.
Irdai is planning to review a gamut of guidelines and bring down the number of guidelines from around 100 to 10 or 15 guidelines. “Regulations will be principle-based, rather than rule-based. The idea was that the industry has matured enough during its journey spanning more than two decades since its opening up and they know the rule of the game better now,” Panda said.
The Irdai Chairman made it clear that the regulator will be having light regulation and tech-based supervision. Panda, who took over as the Chairman of Irdai last month, after retiring as Secretary, Department of Financial Services (DFS), said the regulations should spur positive development in the industry. In a bid to bring about a cordial relationship between the IRDA and the industry, Panda, who met insurers on April 6 and 7, has assured insurers that there will be regular in-person meetings between CEOs and top IRDA officials in every two months in different parts of the country. The regulator is keen to facilitate the entry of captive insurers, standalone micro-insurers, niche players and regional entities into the insurance space.
It has also proposed to dispense with renewal of registration for insurance intermediaries. It’s also exploring the possibility of launching Bima Mitra on the lines of Bank Mitra to enlarge the scope of distribution with an aim to bringing insurance to every doorstep, he said. He added norms will be reviewed so that insurers can offer allied and value-based services in health insurance like membership in gymnasium.
Irdai has also proposed moving insurance supervision towards outcome based and technology driven that is aligned with international standards. There is also a proposal to rationalise investment norms applicable to insurers, Panda said. Emphasising that there should be new products for millennials, Panda hinted at coming up with new channels of distribution in future. When it comes to overall insurance penetration which includes both life and non-life insurance in India, the insurance penetration was 2.71 per cent in 2001 and has steadily increased to 4.2 per cent in 2020.