The insurance bill passed in both houses in March 2015 is expected to have a major impact on the Indian insurance industry. Long awaited and anticipated, this change brought a ton of benefits to both the insurance company and the policyholder. More power for regulators, more protection for policyholders and more foreign investment in the industry are some of the main features of the insurance law.
Here are some key highlights of the bill and how they could affect you:
Increased foreign investment: The new amendment allows up to 49% foreign investment in Indian insurance companies from now on. This increased capital flow is expected to revitalize the entire industry. The national players can now invest in new products and expand their portfolio in many ways.
What does this mean for you: what does this mean for you as a policyholder? Well, at first glance it may not seem important at all, but more foreign participation means more competition, a wider range of products and more professionalism. The increased competition in the market will also reduce malpractices such as miss-selling and misleading policyholders. So in the long run, this move can actually change the entire scenario of the Indian insurance market.
An authorized IRDAI: This act goes a long way in strengthening IRDAI’s fist. This governing body will now be involved in the grassroots level, such as appointing insurance agents and monitoring their suitability, competence and professionalism.
Also, this governing body is now empowered to regulate key areas of insurance companies such as expenses, investments, commissions to be paid to agents, code of conduct etc.
What it means for you: This enhanced IRDAI jurisdiction is sure to put an end to many malpractices that are rampant in the insurance market in India today. So as a policyholder your money is now safer than before.
Consumer Safety: The Indian insurance market has never been more secure than it is from a consumer point of view. If you are concerned about being deceived by the insurance agent, this act will give you peace of mind. In an effort to curtail malpractice, the new amendment imposes fines ranging from INR 1 Crore to INR 25 Crore on any insurance company that indulges in misselling and misrepresentation.
What it means for you: Given this hefty fine, companies are likely to impose strict standards on their agent, which in turn will give you more protection as a consumer.
The bill also makes the payment process easier for each policyholder’s nominees.
Another very important change that the bill introduced is the shortening of the rejection period for each policy. Waiver time is the specific time period within which a policy can be voided in light of misinformation provided by the policyholder. In the new bill, this time has been shortened to 3 years in order to keep consumer interests intact.
Health Insurance: Health insurance in India has never quite achieved the status of a separate business industry. But this insurance bill identified and solved the problem. The amendment defines “Health Insurance Business” in full detail and includes personal accident coverage and travel accident coverage in it.
What does this mean for you: This move will certainly pave the way for many robust insurance products related to health.
Authorized Industry Council: The insurance industry’s two councils, the Life Insurance Council and the General Insurance Council, are now given the status of self-regulatory bodies under this Act. Now these two industry councils have the right to make ordinances for their meeting and elections. The bodies can also levy and collect fees from its members.
What it means for you: The empowerment of these agencies has now opened the avenues for communication between industry stakeholders.
Opening up the business front for reinsurance in India: Due to the new legislative changes, the reinsurance segment has been opened up quite widely. With a foreign investment ceiling of 49%, the foreign investors can now insure part of the insurance company.
What it means for you: A reinsurer takes a major risk factor away from your insurance company. Reinsurance companies are generally more aware of international insurance practices. Opening up reinsurance opportunities will therefore bring in knowledge and expertise from the international players and make insurance companies much more stable.
With all these key points, the Insurance Bill, 2015 was robust and could meet even most expectations.
Recommended
- Mexican car insurance - don't leave the house without it! Bill Kitto was not traveling for the first time in Mexico when he had an accident near San Vincente, Mexico while driving his friend's truck. Bill was an extraordinarily careful driver and was at the wheel as road conditions deteriorated due to an oncoming rainstorm, leaving him at the mercy…
- Why the sudden increased interest in comparing pet insurance… Why are pet owners suddenly hearing and seeing more information about pet insurance and pet insurance comparisons? Could it be that there is a "behind the scenes" push, so to speak, throughout the pet insurance industry to generate more revenue during tough economic times? Who knows? It might as well…
- Investing: the best way to win is not to lose much - the… "Our fund is at the top of its Lipper category." "Our fund has a Five Star Rating from Morningstar." "Our fund has gained X% over the last year (or 3 years or 5 years)" How many times have you heard such claims/statements from investment companies, mutual funds or insurance companies…
- Characteristics Of Term Life Insurance - What Are The… What are the features of term life insurance? A term life insurance policy pays a certain amount of money to the beneficiaries if the named insured dies within the term of the policy. That is the basic definition of term life insurance. The policyholder pays premiums throughout the term to…
- How do you choose the right life insurance policy? Life insurance offers you and your family security; it provides financial protection to a family if the breadwinner dies. Death is inevitable for everyone; that is why family planning is important for those who are married, they should buy life insurance to make up for the lost income in case…
- Avoid these six common life insurance mistakes Life insurance is one of the most important parts of any individual's financial plan. However, there are many misunderstandings about life insurance, mainly because of how life insurance products have been sold in India over the years. We have discussed some of the common mistakes that insurance buyers should avoid…
- Medical billing payment delays – the payer's best tactic to… Q: Do insurance companies benefit from late payments? A: Yes, they do. Delays in payment are directly proportional to profit: the longer the delay, the higher the profit. In some cases, half of their profit margin comes from the float, such as Aetna in 2006: Premium 7% Interest on premium…
- Best Insurance Information for Small Businesses: How to Find… Are you a small business owner? Whatever type of business you run, you will need general liability insurance and perhaps some additional coverage, depending on the industry you operate in. How do you know how and where to get the best small business insurance?Read reviews about different insurance companies from…
- Wondering if health insurance would have helped? The best thing in America is free health care. Health insurance is one option that can provide you with this. Given the way health care costs have risen; many families have gone bankrupt paying the bills for a sick member of the family. Some are lucky enough to have health…
- Three ways insurance companies benefit from GPS tracking Insurers are always looking for ways to improve their business. They are most vulnerable when they insure assets such as motor vehicles (of any kind). These quickly lose their value and are often targeted by thieves due to their mobile nature. It makes sense for insurance companies to embrace GPS…
- Should you invest or buy LIC capital plans? Insurance companies must offer a range of plans and policies suitable for policyholders. Life Insurance Corporation, popularly referred to as LIC, is known for its LIC endowment plans, a form of life insurance and investment plan.While other private insurance companies focus on other forms of insurance, most of the policies…
- Home Insurance - The ultimate savior 'Home sweet home', this saying quite soothes the warm and cozy feeling of the people. It's actually where we tear off our masked face and tend to stay to ourselves. In other words, a home releases us from any kind of tension and allows us to rest in peace after…
- What you need to know about life insurance before you buy Whole life, also known as straight life or permanent life insurance, provides lifelong protection for a specified amount. Whole life is in fact term life insurance with the addition of an investment component. Life insurance has many advantages over term life insurance.AdvantagesLifetime policies are generally a bit more expensive, but…
- How your company and employees benefit from supplementary… As health care costs continue to rise, employers have begun to shift the burden of health care costs onto their employees. Some have even cut back on employer-paid benefits. The health care law requires that most people receive medical coverage and most employers provide major medical coverage with certain essential…
- Reduce your taxes with international tax planning International tax planning means developing the fairest tax regime for the taxpayer. Globalization brought new opportunities for both resident and non-resident individuals and legal entities. Based on our practical experience, the following are useful tips for those who want to save tax.How to lower your taxesFirst of all, there are…
- Cost of medical treatment, drugs and pharmaceutical industry… My old distant uncle, who migrated to the states of Ohio 20 years ago, came to India for heart surgery. When questioned, he said the hospital's infrastructure is among the best in the United States. But the number of patients in cardiac surgery, dental surgery, breast surgery, cosmetic surgery is…
- Overseas Travel Insurance Plans - Costs Less and Offers More Everyone craves vacations to enjoy some quality time with their loved ones and Indians are no exception. India's outbound travel industry has seen solid growth this year as international travel destinations are highly sought after among Indians in 2015. the world. More than 60% of Indians remain unmoved by the…
- Excessive use of your health insurance When reviewing health plans and evaluating costs, keep in mind that health insurance is not designed to cover every cent related to health care. Anything under the sun on an open credit card is nice, but not if you're paying the bill. But you are. The purpose of insurance is…
- Charge patients for deductibles, copays, and coinsurance… Many offices lose money by not collecting all of the money owed to them from patient responsibilities. Some do it by choice, and others because they don't have a system for their patient billing. They don't even realize that the patients are not paying the part due. In any case,…
- Know about different life insurance plans Today, almost everyone has life insurance. It could be for various reasons such as investment purposes or tax benefits, but the main point is that it offers complete peace of mind. With insurance plans, one does not have to worry about the future safety of their family during their absence.…