Irdai forms committee to review Insurance Act

MUMBAI: Insurance Regulatory and Development Authority (Irdai) has set up a high-powered committee led by former SBI chairman Dinesh Khara to review key aspects of Insurance Act, 1938. The committee, which includes top industry experts, is expected to submit its report in three months.

Based on recommendations of the Khara committee, Irdai will propose changes to the Union finance ministry, after which the department of financial services will issue a new draft bill for stakeholder feedback.

The committee includes Dinesh Khara, former SBI chairman; N Kannan, former CEO of ICICI Pru Life; Saurabh Sinha, former ED at RBI; Girish Radhakrishnan, former CMD of UIIC; Alok Mishra, MD and CEO of MFIN; Rakesh Joshi, former WTM at IRDAI; and legal expert L Vishwanathan.

Industry sources said the formation of the committee suggests that insurance reforms may take longer than expected. The regulator appears to be laying the groundwork to facilitate the proposed changes in insurance laws announced by finance minister Nirmala Sitharaman.

In the Budget, Sitharaman said govt would amend the Insurance Act to allow 100% foreign direct investment in the sector. She also said safeguards would be implemented to ensure that revenue from insurance sales remains within India.

At a post-budget press conference in Mumbai, financial services secretary M Nagaraju said that apart from permitting 100% FDI, govt would also allow composite insurance companies to operate. These firms provide life, non-life, and health insurance under a single entity.