Welcome reforms

But exclusion of composite insurance licences in the Bill shows India's strange insistence on maintaining silos

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THE INSURANCE AMENDMENT Bill passed by Parliament on Wednesday marks the most substantive overhaul of India's insurance framework in years, though there are a few notable omissions. The 100% foreign ownership should unlock fresh capital, strengthen insurers'balance sheets, and enhance the sector's ability to underwrite larger and more complex risks while expanding reach in underpenetrated segments. Stronger capitalisation will also enable insurers to invest meaningfully in advanced underwriting capabilities and digital infrastructure. Equally important are the governance-related provisions. Measures such as capping commissions and empowering the regulator to order disgorgement of wrongful gains strengthen oversight and promote more orderly conduct. Mere monetary penalties, as imposed earlier, were often treated as a cost of doing business. The new framework signals a tougher stance on mis-selling and regulatory breaches.