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Lok Sabha Passes Sweeping Insurance Reform
17 Dec
Summary
- The Lok Sabha approved the Sabka Bima Sabki Raksha Bill.
- The new law permits 100% foreign direct investment.
- Commissions and expenses within the insurance sector will be capped.
The Indian Parliament's lower house, the Lok Sabha, has successfully passed the comprehensive Sabka Bima Sabki Raksha Bill. This legislative achievement is poised to reshape the country's insurance landscape significantly by strengthening the oversight capabilities of the Insurance Regulatory and Development Authority of India (Irdai).
A key provision within the new law is the allowance of 100% foreign direct investment, a move expected to attract considerable international capital into the sector. Furthermore, the bill introduces stringent caps on commissions and operational expenses, signaling a commitment to greater efficiency and cost control.
While initial market reactions saw a dip in insurance company shares, experts anticipate that these reforms will ultimately lead to increased insurance penetration and stimulate overall sector growth. The removal of specific provisions related to commission and remuneration structures is also a notable aspect of this forward-looking legislation.
