- A policy known by the name of ‘Health plus Life Combi Product’, offering life cover along with health insurance has been granted permission by the IRDA act and insurance companies are allowed to provide it now.
- The FDI limit in the insurance sector has been capped at 26% for the foreign marketers but the government is thinking to increase it to 49% and a bill of this offer is pending at the Rajya Sabha.
- A low cost pension scheme is supposed to be formed by the Pension Fund Regulatory and Developmental Authority (PFRDA) on 1st April, 2010 to provide social security to the poorer class.
- The compulsory ceding by every General Insurance Corporation (GIC), would go on to stay at 10% under current regulations as specified by IRDA.
The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (RDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for 1oreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. In 2000 IRDA started giving licenses to private sectors. ICICI prudential and HDFC standard life insurers were the first private insurers in India. In 2001 Royal Sunderam Alliance started as the first non-life insurance company in India. In 2002 banks are allowed to sell insurance plans. In 2007, first insurance online portal is set up by an Indian insurance broker, Bornsai Insurance Broking Private Limited.
The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. With the deregulation of Indian insurance industry, the monopoly of Indian public sector companies in life insurance and general insurance come to an end. In the private sector 12 life insurance and 8 general insurance companies have been registered. A host of private Insurance companies operating in both life and non-life segments have started selling their insurance policies since 2001. There are now 29 insurance companies operating in the Indian market – 14 private life insurers, nine private non-life insurers and six public sector companies. With many more joint ventures in the offing, the insurance industry in India today stands at a crossroads as competition intensifies and companies prepare survival strategies in a detariffed scenario.
There are opportunities in the pensions sector where regulations are being framed. Less than 10 % of Indians above the age of 60 receive pensions. The IRDA has issued the first license for a standalone health company in the country as many more players wait to enter. The health insurance sector has tremendous growth potential, and as it matures and new players enter. product innovation and enhancement will increase.