Insurers may be able to offer assorted allied services to customers as part of the proposed amendments to the Insurance Act, 1938. For instance, gym membership may come with a health insurance policy and motor repair services may be offered to those who take vehicle insurance.
According to sources close to the development, the amendments to the Insurance Act and the IRDA Act have been finalised and will be taken to the Cabinet soon. Though the timing of their introduction in Parliament is still not decided, they could be taken up in the current session of Parliament.
“Concerns by industry players on composite license have also been addressed and the provision will remain. The work on the Bill has been completed and there are no major revisions from what was put in the public domain for consultation,” said a source close to the development, adding that the amendments could be taken up for approval by the Union Cabinet later this month.
A new provision is proposed to be inserted as part of the amendment that would allow insurers to provide services “related or incidental to insurance business” and may also distribute other financial products as specified by and subject to regulations.
“At present, these services are provided in partnership with another company but now insurers may be able to offer them directly. For instance, a health insurer could offer gym membership while a general insurer could provide garage services to their customers. This would be an additional source of revenue and would also ensure that claims are in check,” said the source.
The government had in November 2022 invited comments on proposed amendments to the Insurance Act, 1938 and Insurance Regulatory and Development Authority Act, 1999. The last date for submitting comments was December 15, 2022.
The amendments include far-reaching changes including the proposal for a composite insurance registration with which would enable insurers to undertake multiple types of insurance (barring re-insurance) through a single entity. It also seeks to remove the minimum capitalisation requirement of `100 crore and would instead be specified by the IRDAI based on the size and scale of operations, class or sub-class of insurance business and category of the insurer.