Insurance Regulatory and Development Authority of India (IRDAI) Chairperson Ajay Seth announced plans to release updated guidelines for banks to curb the mis-selling of insurance products. The ‘Bima Sugam’ platform is set to launch by September this year, starting with motor insurance and expanding to health and term-life products. Seth also mentioned progress in foreign direct investment (FDI) in the insurance sector, with approvals for increased stakes in Indian life insurance firms.
The recent government notification allowing 100% FDI in the insurance sector under the automatic route will enhance foreign investor participation. However, Life Insurance Corporation of India (LIC) will maintain a separate framework with a 20% foreign investment cap under the automatic route. Additionally, 100% FDI under the automatic route is now permitted for various insurance intermediaries as specified by IRDAI.
During an event, Seth hinted at a forthcoming framework for product suitability in sales, emphasizing guidance over strict regulations. IRDAI’s recent approval of a new general insurance license reflects ongoing regulatory developments. Furthermore, recent IRDAI measures have linked top executive remuneration to customer outcomes, financial health, and transparency disclosures, ensuring alignment with defined performance parameters.
