Centre mulls rule changes to boost insurance sector

India is considering rule changes to bolster insurance penetration in the country as more companies, including foreigners, line up to enter the segment.

“Proposals for amendments to insurance laws include rationalized capital requirements, composite registration, one-time registration for intermediaries, value-added services by insurers, and sale of other financial products,” Debasish Panda, chairman of the IRDAI, told.

Insurance penetration remains abysmally low at less than 5% in the country of 1.4 billion people, signaling growth potential for investors.

The country allows overseas investors to hold up to 74% stake in insurers. Global firms such as American International Group Inc. and Prudential Financial Inc already have a presence in India through their local partners.

Four new firms have entered the nation’s insurance sector in the last year, and a few more are in various stages of enrollment, indicating the business environment is favorable, according to Panda.