Chennai, Dec 17 (IANS): The year 2014 was of renewed hope with a twist for private insurers with the new central government led by the Bharatiya Janata Party (BJP) deciding to go ahead with allowing 49 percent foreign capital in the sector.
The twist is the pre-condition that the private insurers should be Indian-owned and controlled entities.
A select committee of the Rajya Sabha led by BJP member Chandan Mitra has recommended so.
There are 24 life and 28 non-life companies in India and several of them are run by the foreign promoters with just 26 percent.
Apart from that, the central government's proposed motor vehicles law, when enacted, would benefit non-life insurers as there will be safer vehicles, drivers and roads.
"It was a year of legislative and regulatory action. Though the two major bills - Insurance Laws (Amendment) Bill and the Road Transport and Safety Bill - have not been passed, the steps taken are in the right direction," General Insurance Council of India general secretary R. Chandrasekaran told IANS.
He said the Insurance Regulatory and Development Authority (IRDA) also issued an advisory on adequate pricing of property and group health insurance policies.
The Insurance Information Bureau (IIB) is expected to come out with benchmark rates based on industry data.
The year saw an upward revision of motor insurance premium and IRDA licensing Health Insurance TPA of India - the common claims processing agency for the four government owned non-life insurers.
Meanwhile, the Competition Commission of India (CCI) has ordered a probe by its director general against General Insurers' (Public Sector) Association of India (GIPSA) and other public sector non-life insurers for alleged anti-competitive practices.
The fair trade regulator also said the move of the government-owned non-life insurers was against the prevailing worldwide practice to keep the claims processing agency independent from the insurance companies.
On the life insurance side, the players launched new products aligned with the new regulations, though overall growth was in the negative region during the year.
"However the new product launches were stymied owing to IRDA's decision to approve only up to five products for an insurer in a year," a senior official of a life insurance company told IANS, preferring anonymity.
The year also saw the central government levy a two percent tax deduction at source on some insurance payouts.
To increase the number of intermediaries the IRDA came out with its draft regulations for insurance marketing firms (IMF) while a committee has proposed multiple corporate agencies (MCAs).
Also, the Pension Fund Regulatory and Development Authority (PFRDA) is finalising various regulations following the notification of the Pension Fund Regulatory and Development Authority Act in February.
Highlights:
* BJP-led central government decides to increase FDI in insurance to 49 percent but the insurers are to be Indian-owned and controlled
* Health Insurance TPA of India - the common health insurance claims processing company for four government-owned non-life insurers licensed by IRDA
* Aditya Birla group announces its decision to foray into health insurance sector; Kotak Mahindra Bank gets Reserve Bank of India's permission of enter non-life sector
*IRDA continued to penalise insurers for violating its regulations and for not settling claims.