The insurance sector did not witness unprecedented growth or high sales volume during 2015. However, thanks to a few crucial factors that steadied the sector, insurance firms were able to ride out their cash crunch and brace themselves to offer new products in 2016. Here are some of the major reforms that the sluggish sector witnessed in 2015.
Insurance Laws (Amendment) Bill, 2015
With the passing of the Insurance Laws (Amendment) Bill 2015, the sector witnessed a fresh inflow of capital, eliminating the cash crunch that most insurance companies were facing. With an approval of 49 per cent direct foreign investment in the sector, new players are likely to enter the market in the near future. The consolidation of the insurance market means more products and offers for consumers to choose from.
Mis-selling now a thing of the past
One big problem almost everyone faced while buying insurance was the rampant mis-selling. With the passing of the Insurance Laws (Amendment) Bill, 2015, a penalty clause fining insurance companies up to Rs 25 crore for mis-selling was announced. With Insurance Regulatory and Development Authority (IRDA) getting more powers to ensure that consumers protection remains paramount, one can now buy insurance without worrying about being sold a plan that offers no benefits.
Amended discharge vouchers rule
Earlier signing on a discharge voucher nullified a consumer’s right to complain against denial of adequate claims in the past. Not anymore, as the IRDA has ensured that even if a consumer signs on a discharge voucher he/she can still retain the right to challenge the claim denial in a court of law. This is an added privilege for policy holders.
Increasing use of technology
The role of technology has brought about a major change in the sector. Insurers are now using technology to track all its potential claims, thereby speeding up claim verification. With insurance companies relying more on technology thereby lowering their manpower requirements, it helps them to reduce their costs.
Professional indemnity plans
Professional indemnity plans were not as popular in India as compared to other countries. With an increase in financial awareness and easy availability of professional indemnity plans, there has been a substantial increase in the number of professionals opting for such plans.
Likely reforms in the insurance sector in 2016.
The current year is likely to witness many more reforms. Here is a look at what is in store for the consumers. The universal health insurance plan: The government is working on the modalities to announce a new universal health insurance plan. The plan is likely to cover cashless hospitalisation and coverage for pre-existing diseases after a waiting period of around 2 years, all with a nominal premium payment. There are also talks of the government coming out with a consolidated cover for the universal health plan for the entire family with a single sum insured.
Health insurance to witness innovative product line: With rising medical care costs and inflow of new insurance companies after relaxation of FDI norms, a host of new and innovative health insurance plans are likely to be in the offing. Life stage based plans, city based plans, and many new innovative products are being contemplated by various insurance companies to tap the health insurance market.
Customised insurance: Consumers may soon be able to purchase a custom made insurance plan, considering specific needs and financial plans, rather than a one-for-all plan. From life insurance to general insurance, just about every insurer is now open to the idea of offering a customised insurance plan based on certain fixed parameters and guidelines.
The insurance sector is now looking forward to a rejuvenated 2016, after getting a positive impetus in 2015. As an insurance seeker, one can expect innovative and unique products in the near future.