With an aim 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, permitting direct investment by private equity funds into insurance companies, dilution of promoter stake up to 26 per cent and allowing insurance companies to raise alternative investments like subordinated debt and preference shares without any prior approval.
Bhargav Dasgupta, MD & CEO of ICICI Lombard General Insurance Company said, “These are path-breaking reforms that will improve ease of doing business, free up distribution models, encourage customer centric innovations and make the sector attractive for investment. The regulator has addressed a number of long pending issues of the industry in one stroke! The vision of the regulator to ensure Insurance for all is truly inspirational and these reforms will go a long way in achieving that objective”
Experts say the amendments to regulations pertaining to dilution of promoter stake up to 26 per cent and making SPV mode for PE funds optional will result in more funds flowing into the sector.
Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance said, “IRDAI is playing a pivotal role to align the industry towards the requirements of the evolving needs of India’s life insurance customers. The speed and the transformational reforms being introduced, such as expanding partnership options for corporate agents and IMFs, relaxations provided for incorporating new companies and attracting further capital, are just a few examples of the changes being designed for the benefit of the customers, and the industry at large. We welcome these changes and are aligned to the agility of the regulator to further advance the industry."
Welcoming the changes, the industry veteran Kamesh Goyal, Chairman, Go Digit General Insurance, said, “The new proposals approved by the IRDAI in the 120th Board Meeting is a watershed moment and will surely mark a new era for the insurance industry. Increasing the tie-up limits for corporate agents and insurance marketing firms to nine and six insurers each respectively for life, general and health insurers will give policyholders a wider choice of opting for innovative products offered by insurers and aid in the government and IRDAI's vision of accelerating insurance penetration in the country.”
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