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The Insurance Bill passed in March 2015 in both houses is expected to have a deep impact on the Indian insurance industry. Much anticipated and awaited, this change offers a lot of benefits to both the company and the policyholder. Increased powers for regulatory bodies, more protection for policy holders and increase the amount of foreign investment in the industry are some of the key features of the insurance bill.
Here are some of the main highlights of the bill and how they can affect you:
Increased Foreign Investment: New amendment does up to 49% foreign investment in Indian insurance companies from now continue. It is expected this increased capital flow to revitalize the industry all together. Domestic players will now be able to invest in new products and expand their portfolio manifold.
What this means for you: how is this going to affect you as a policyholder? Well, at first glance may seem irrelevant at all, but increased foreign participation means greater competition, a wider product range and greater professionalism. Increased competition in the market will also reduce malpractices such as miss-selling and misleading policy holders. So, in the long term move can really change the whole scenario Indian insurance market.
An authority IrDA: This act goes a a long way in strengthening the fist of IRDA. This governing body will now continue to participate in the grass root level, such as ships insurance agents and monitoring their qualifications, ability and professionalism.
Also, this governing body is now authorized to regulate key areas such as insurance expenses, investments, commissions payable to agents, protocols, etc.
What this means to you: The extra power IRDA is sure to draw many malpractices are rampant today the insurance market in India. So, as the policyholder’s money will now be safer than ever.
Consumer safety: Indian Insurance market was never as safe as it is now from the consumer point of view. If you are worried about being misled by insurance agent, then this act will give you peace of mind. In an effort to deterioration malpractices, new change levies punishment from INR 1 Crore to 25 Crore INR any insurance company that performs mis-selling and misrepresentation.
What this means for you: In the light of high penalties, companies are more likely to enforce stricter guidelines for their agent, who will then give you more protection as a consumer.
The Bill will also make the payment process easier for the policyholder nomination.
Another very important change that Bill was short for denial is time for the policy. Rejection time the particular period in which the policy may be declared invalid in the light of incorrect information furnished by the policyholder. The new bill shortens this period to 3 years, to keep consumer interest intact.
Health Insurance: Health insurance in India never quite received the status of a separate business vertical. But this Insurance Bill identified and addressed the problem. The amendment defines “health insurance card business” in an accurate and includes personal accident coverage and accident coverage while traveling in it.
What this means to you: This action will certainly shape the way many powerful insurance products related to health.
Power Industry Council: The two Insurance industry advice The Life Insurance Council and General Insurance Council are now given the status of self-regulatory bodies under this Act. Now the two industry councils the right to frame bye-laws for their meeting and elections. Also organizations can levy fees and collect them from the members.
What this means for you: Improving these parties has now opened the means of communication between stakeholders in the industry.
The opening of the reinsurance front in India : The new changes in the law have opened up reinsurance segment quite broadly. 49% foreign investment cap, foreign investors can now secure part of the insurance company.
What this means to you: A back-off company takes a major risk factor by the insurance company. Re-insurance companies are generally more knowledgeable about international practice insurance. Thus opening up a re-insurance option will bring in knowledge and expertise from global players as well as make insurance more stable.
with all these major sites, Insurance Bill 2015 was strong and actually could stand up to the most expectations.