IRDAI proposes amendments in Insurance Act, recommends perpetual licenses for intermediaries 

Soon intermediaries or distributors may not have to renew their license or registration after every three years as they can get one-time registration or license from the regulator, the Insurance Regulatory and Development Authority of India (IRDAI).  

Debasish Panda, Chairperson, IRDAI at the CII Annual Session 2023, said, "We have sent some proposals to the government for amendments to Insurance Act, and we have recommended that currently the intermediaries or the distributors are required to come and renew their license or the registration after every three years. So we have requested that the change we made is that it is not required to come in every three years. One-time registration or perpetual license, and if somebody does anything miss, then you can always take action by revoking their license. So there is no need. It is an unnecessary compliance burden and takes away a lot of the regulator’s time without much value addition." 

Besides, the chairperson also said that the amendments to Insurance Act would actually enable the entry of new players in the form of micro players. It would enable the entry of new players in the form of regional players, small players, captive players, specialised players and even composite licenses. “By doing this kind of differentiation, we will be able to cater to the different geographies and the different strata of the population.” 

He also said that if one looks at the banking side, typically, they have differentiated different types of banks so that they are focused on trying to address the needs of that particular geography or population. So if this happens, differential capital requirements will be recommended to new players.  

The last recommendation Chairperson made is how insurance companies can offer value-added services along with insurance products. Currently, the statute doesn't permit them to do so. For instance, if the insurer sells a health policy and provides you with a Yoga membership or a health club membership along with the insurance policy, then millennials will get on to buy such policies. “I would believe that the young millennial would be more keen to go for such a product rather than buying a vanilla product like health insurance coverage. Insurers can offer nursing services to the parents of the person living far away from where he/she is working,” said Irdai Chairperson Debasish Panda. 

The regulator also suggests that the amendments can come on a fee-based model as it may require much capital for insurers to make changes in their products and services. The regulator believes these value-added services will create a lot of interest among millennials to buy insurance products and services. 

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