Dinesh Khara, former chairman, State Bank of India
Panel will look into various aspects of Insurance Act 1938 and suggest amendments
The other members of the panel are-N. Kannan , former CEO ICICI Prudential Life Insurance, Saurabh Sinha, former executive director, Reserve Bank of India, Girish Radhakrishnan, former CMD, United India Insurance, Alok Mishra MD & CEO, MFIN, Rakesh Joshi, former member of IRDAI and L.Vishwanathan, a legal expert
Hyderabad: Even as the government is now getting ready to bring in the Insurance Amendment Bill in Parliament for allowing 100 per cent FDI in the sector, the Indian insurance regulator IRDAI has constituted a high power committee, under the leadership Dinesh Khara former chairman of State Bank of India (SB)I, to look into various aspects of Insurance Act 1938 and suggest amendments to it.
The committee had already its first meeting on Tuesday.
The other members of the panel are-N. Kannan , former CEO ICICI Prudential Life Insurance, Saurabh Sinha, former executive director, Reserve Bank of India, Girish Radhakrishnan, former CMD, United India Insurance, Alok Mishra MD & CEO, Micro Finance Institutions Network (MFIN), Rakesh Joshi, former member of IRDAI and L. Vishwanathan, a legal expert.
The Insurance Act, 1938 is a law originally passed in 1938 in British India to regulate the insurance sector. It provides the broad legal framework within which the industry operates. It also led to establishment of the regulatory authority, IRDAI, which oversees the implementation of the act.
The Insurance Act 1938 outlines the various types of insurance policies that can be offered in India, such as life insurance, general insurance, and health insurance and allows insurers to appoint insurance agents for the purpose of soliciting and procuring insurance business.
However, analysts have pointed out the lack of domain and sectoral experts in the Khara panel.
There are well known banking experts, regulators and other specialists in the panel. It would have been better to involve senior professionals with domain knowledge in insurance Insurance, said analysts.
However sources in the IRDAI has clarified that Khara as the chairman of SBI was heading two SBI Insurance entities and as such has an understanding of the financial sector regulations and amendments.
With the presence RBI executive director and with the participation of all these banking experts, the committee should have a proper balance of individuals from diverse areas of financial sector and should not be overly crowded with sectoral experts. Besides senior officials from the regulatory body will always be actively involved in various deliberations of the committee, explained IRDAI sources.
Earlier Finance minister Nirmala Sitharaman, while presenting the current Budget in the Lok Sabha , had announced the proposal to raise the foreign direct investment limit in the Indian insurance sector from 74 per cent to 100 per cent.
Sithraraman further stated that the Centre is working on more reforms in the insurance sector, along with the 100 per cent FDI move, without indicating time line about when the various Insurance Acts can be amended by Parliament and new reforms measures can be implemented.
Guardrails are being put so that citizens’ money towards premium payment for insurance is kept within the country, she said.
On the proposed Insurance Amendment Bill, M Nagaraju secretary, financial services, Ministry of Finance, had said internal consultations have been completed for the same, and it includes allowing composite licenses, details regarding investments and the repatriation of profits in case of foreign direct investment (FDI).
“We have almost completed the internal governmental consultations. Then, we will take the next course of action by bringing the proposed amendment bill to Parliament. Once it is approved, those rules will also be notified so that all the reforms we intend to do in the insurance sector to improve penetration will be done through these measures,” Nagaraju said.
Analysts in Delhi have said after the Bill is ready, it will be tabled in either of Houses and will be sent to a Standing Committee for further deliberations before it is back in Parliament for the final legislative approvals.
All these will be a time consuming process, said analysts.
The government’s major reforms proposals like composite license’, differential capital’, reduction in solvency norms’, issuing captive license’, change in investment regulations’, one-time registration for intermediaries’ and `allowing insurers to distribute other financial products.
Earlier, the government had planned to repeal The Insurance Act 1938’ as it has undergone many changes since its inception and has become cumbersome to understand for common people.
Moreover, the legislative move to amend the Insurance Act 1938’ with new amendments is in the line with the government’s ongoing overall exercises involving review of all Pre-Independence Acts from the point of view of their utility and relevance, said sources.
The government now wants that the entire legal code of the country should remain purely Indian and existing laws made by a legislature of the Pre-Constitution era should be replaced with laws made by the legislature which is in place post-independence.
Congratulations to the new initiative of IRDAI.
However, it is surprising to find well known experts in banking and other specialist areas in a team that requires core domain knowledge in insurance and allied areas. Unfortunately, many don’t appreciate that experts in other domains are constrained to put in a lot of effort to add value to such specialized areas.
Completely agree with your view points sir. Insurance is a very dynamic and specialised subject which require sound knowledge of the various aspects pertaining to this and also fare understanding of risk analysis. Hence there should have been some senior members from Insurance industry to bring in the change would be most desirable and ideal
no no ji
There is no member from the biggest insurance corporation like LICI. The experience and excellency of this corporation would help in the interest of public and insurance sector. But this government never act in the interest of public
ONE MOST IMPORTANT SOCIAL SECURITY MOVE FOR NORMAL INDIAN CITIZEN AND SENIOR CITIZENS- GOVT MUST GIVE SUBSIDY IN PREMIUM. ALTOUGH PM ANNOUCES SCHEME, BUT IT HAS NO USE AS NO SENSIBLE CITIZEN GO FOR TRETMENT IN GOVT HOSPITAL
THEY TREAT LIKE DOGS N BEGGARS. WHY FIRST ALL GOVT EMLOYEES AND POLITICAL LEADERS SHOOULD GO THERE. NO REMURSHMENT OF PRIVATE HOSPITALS SHOULD BE GIVEN TO THEM. BEURACACY IS RESPONSIBLE FOR INDIAN CORRUPTION
Open architecture is good for both agent and customers, this way customers will get the best product and agents will get the opportunity to sell the best products of the market.
And insurance companies will start making best products in competition.
So ultimately winner will be CUSTOMER.
Domain expert. One in the panel could be Hari Radhakrishnan. Why not ?
Remove 3 years compulsory TP for pvt cars while buying new vehicle and 5 years TP cover for 5 years. It’s ridiculous. If the customer delayed few days of renewing his own damage policy, the expiry dates of own damage and third party get changed. And to correct this, insurance companies and clients have to struggle a lot
The panel should also focus on the plight of the insured in getting the claim settled without hassles. There should be a customer friendly framework to prevent the unscrupulous insurers from rejecting/repudiating genuine claims on flimsy ground.
The proposal to reduce the solvency margin is not tenable in any way.
সলভেন্সি মার্জিন কমানোর প্রতস্তাবটা কোন মতেই সমর্থনীয় নয়।
True. There are plenty of Experts available in insurance domain, whose services could have been taken.
There should have been more presence of domain experts both life and non life. Moreover absence of any serving officials from PSUs Insurance company may lead to compromised recommendations.
It is good move.
Totally agree with you. More experts from Insurance industry is required in the team
This will be great achievement for insurance sector on new way where tomorrow world will be based on insurance
Insurance is very complex; its size and depth are as wide as an ocean. an expert in one sector is illiterate in other sectors. With domain expertise, the committee can be expected to be fruitful
Exemptions given to State Governments under section 118(c) should be withdrawn.This exemption has resulted in massive misuse and corruption in Maharashtra.
Main experts of insurance companies such as LIC should have been in the panel…
Required more&more customer benefited Policies & create the various grievance redressal mechanism(s) like Insurance Ombudsman as cheap redressal forum to protect the interest of the customer & direct the every INSURER to mention the name, address & email ID etc. in there Policy schedule & Jacket.
Regards .
It’s a good move by the Govt, but we need experts from Insurance industry to be actively involved in framing new policy.
Insurance experts are must in this committee and give less importance to Govt Bureaucrats.
Surprising to see no person (either Current/Ex..) from Insurance Mammoth LIC is not included in the Committee
The committee should have more insurance experts. 100% FDI,open architecture for agency and reducing solvency ratio need a hard look. Not a good idea at all.Even 74% FDI limit has hardly any takers. Also proposals like 1 year of freelook are going to have adverse impact on the sector. Insurance provides long term funds for infra development and should be treated carefully.
Dinesh Sir it’s great opportunity to work under your leadership
Welcome Sir
Experts from insurance need not be there. If that is the case, IRDAI chairman need not be from insurance background. We expect the Committee to address the core issues of insurance education, transparency in insurance dealings and robust grievance redressal mechanism
Very good initiative though, the committee should comprise of experts from diverse industries so that the changes are relevant, acceptable, and sustainable.
There is no expert from life insurance in the committee. Largest life insurance company in India is LIC and there is no representative from LIC in the committee.
Excellent initiative taken by Ministry of Finance to revamp Insurance Act 1938 . Committee members are a Learned lot of Higher Management Group and we expect Comprehensive Report on reforms. Suggest Middle Management Group officials should also be part of Committee for apprising about ground realities of Insurance Sector.
Introducing open architech might be harmful for the insurance market n company. It will not prove a healthy competition amongst insurance company.
Mis selling percentage will be increase gradually which customer dissatisfaction level will be high. Service factor also affect im future, in long term basis penetration % might not lucrative as we have taken to the leverage of insurance globalisation in India.
Taking into note polit project with suvey initiation, public awareness should started before we regret to strengthen n streaming the insurance business in our country.
IRDA should also look at extending insurance policies to cover handicapped people.
No insurance currently covers this. Are they not citizens of our country?? why have they been denied access to Healthcare??
Whereas social security is given to every individual in the US unconditionally.
.IRDA should look into this aspect.
IRDAI has functioned more as regulatory authority and less like development one.
During tenure of 24 years , the authority has done very little for attracting foreign Investments , protecting policy holders interst and developing insurance business.
Simple slogan for insuring all by 2047 may not prove it’s worth.
The formation of a high-powered panel under former SBI Chairman Dinesh Khara is a crucial step towards modernizing the insurance sector. With the government aiming to amend the Insurance Act, 1938, and potentially allow 100% FDI, the industry could see significant structural changes.
While the inclusion of banking and regulatory experts ensures a broad financial perspective, the absence of senior insurance professionals in the panel has raised concerns. However, with IRDAI officials actively involved, a balanced approach to reforms can be expected.
If implemented, these reforms—such as composite licenses, changes in solvency norms, and new investment regulations—could enhance insurance penetration and streamline operations. At the same time, allowing 100% FDI might increase competition, pushing insurers to innovate and improve customer offerings.
It will be interesting to see how these recommendations shape the future of the insurance industry and impact companies like SBI Life.
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