Non-Life Insurers Are Opposed To Composite License And Micro Insurers
0Last month the finance ministry has invited comments on proposed amendments to the Insurance & IRDAI Act and ministry has received comments from different stakeholders. As per ET now Sources Non-Life insurers are opposed to few proposed changes in the Insurance act.
Non-Life Insurers are opposed to composite license and micro insurer’s concept of proposed amendment to Insurance Act. In Stake holder’s suggestions to the finance ministry, non-life insurers say it will bring in non-serious players in the sector.
Section 6 of the Insurance act is proposed to be amending Minimum Capital requirement which is presently RS 100 Crores paid up capital for a life, general, Health Insurance Company. Non-life Insurers have suggested that Bringing down the capital will result in cannibalization of existing business and entry of non-serious players which will bring in additional problems in supervision and regulation. Unlike banking industry, the risk covered is high in insurance and the returns are low because of stringent regulations that protect policyholders’ interest. So, to protect policy holder’s interest, capital requirement of Rs 100 Cr should be increased.
Non- Life Insurance Industry is of view that Proposed composite license idea should be dropped at this point of time & Captive insurance also should not be allowed as it will not result in any expansion of the insurance business as such and the result would
be only cannibalization of the existing business.
In proposal to allow Insurers to offer ancillary services Non-life Insurance companies is of the view that the offering of “value added services” should be permitted to Conduct of business that is incidental to the business of insurance only and that too in general insurance segment. Presently Insurers are also not in favor of having differential Solvency margins to suit different classes of Segments.
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