Latest news with #InsuranceLaws(Amendment)Bill
Mint
11-06-2025
- Business
- Mint
Reform push: Insurance amendment bill heads to Parliament; changes to IBC, Companies Act will have to wait
NEW DELHI : The Insurance Laws (Amendment) Bill, proposing sweeping reforms such as 100% foreign direct investment (FDI) and composite licensing, is likely to be tabled in the Monsoon Session of Parliament in July, three people aware of the plan said. However, amendments to clarify the Insolvency and Bankruptcy Code (IBC), 2016, and changes to the Companies Act, 2023, are unlikely to make it to the coming session, the people said on the condition of anonymity. The Centre is also awaiting a Parliament select committee's views on the new Income Tax Bill, 2025, meant to simplify direct tax laws, expected in July, so that it can be introduced in the Winter Session of Parliament towards the end of November or early December, said one of the three people quoted above. The select committee, led by the Bharatiya Janata Party's (BJP's) Baijayant Panda, is expected to give its report on the first day of the monsoon session, likely to begin on 21 July. Insurance reforms The insurance amendment bill was slated for introduction in the Budget session, but got delayed as the finance ministry sought to add provisions on 100% FDI and the ease of operational considerations for foreign investors, requiring fresh vetting by the law ministry before cabinet approval. 'Several provisions of the bill required time for regulatory and industry readiness. It has now been finalized," the second person said, adding that the cabinet approval could come soon. The bill focuses on ensuring clarity and preparedness, said the third person. It will revise three key legislations—the Insurance Act, 1938, Life Insurance Corporation (LIC) Act, 1956, and the Insurance Regulatory and Development Authority (IRDA) Act, 1999—paving the way for greater autonomy for the insurance regulator and the LIC for appointments, office setup, and staffing. The comprehensive legislative structure will eliminate the need for future amendments to the LIC Act and related laws to enable composite licensing. Also read | To curb mis-selling, finance ministry tells lenders to stop incentives on insurance The bill proposes composite insurance licences with a higher capital threshold of ₹150 crore while retaining existing capital norms for insurance and reinsurance at ₹100 crore and ₹200 crore, respectively. A composite licence, already allowed in Singapore, Malaysia, and the UK, will allow a single insurer to offer both life and non-life products, currently permitted only through separate entities. Besides allowing 100% FDI, the bill simplifies operating conditions for foreign reinsurers by slashing the net-owned fund requirement from ₹5,000 crore to ₹1,000 crore. Queries emailed to spokespersons for the ministry of finance and corporate affairs on Tuesday remained unanswered. Experts believe the bill will deepen insurers' reach in underserved rural and semi-urban areas, making insurance more accessible with tailored, affordable products. It will also enhance firms' risk management capacity, speed up tech adoption, and grow their customer base, leading to a strong foundation for long-term sectoral growth. However, some industry executives have their reservations. Also read | The health insurance puzzle: 83% Indians aware but only 19% covered 'The reforms are well-intentioned. Well thought-out? Perhaps not. A 100% FDI for insurers will be welcome, but how many will bite remains to be seen. Even now, many foreign partners in joint ventures have not touched the current permissible 74%," said Balasundaram, secretary general, Insurance Brokers Association of India. 'As for composite licences, it is an uncharted area in India, and the outcomes are not easy to predict. Capital for serious insurers has never been an issue; so, the lowering of the minimum requirement does not really add value," he added. He said ease of operations for foreign entities sounds good on paper, but implementation and market conditions will decide whether it will work or not. In short, outcomes remain an act of crystal gazing as of now. Since 2000, when the insurance sector was opened to private players by gradually raising FDI limits from 26% to 74%, it has seen robust growth. Between 2014 and January 2024, while the number of insurers rose from 53 to 70, insurance penetration grew from 3.9% to 4%, and insurance density nearly doubled from $52 to $92. A flat 4% insurance penetration against the global average of 7% "means that while the insurance sector has expanded, the expansion has been in line with the broader economy and has not really outpaced it, which you would expect a sunrise sector to", said Narendra Ganpule, partner and national financial services advisory leader, professional services firm Grant Thornton Bharat. 'The need of the hour is revolutionary changes, which is what the bill attempts to bring about to propel India to achieve its espoused vision of 'Insurance for all by 2047'," he added. Also read | Heath insurance in India ought to cover preventive care as well Pavanjit Singh Dhingra, joint managing director, Prudent Insurance Brokers, echoed his views, saying the proposed changes will help attract the required capital, greater focus, and a wider distribution network, all of which are critical to deepening insurance penetration, especially in underserved and rural markets. The draft bill also empowers the insurance regulator to set relaxed licensing and capital requirements for smaller insurers or single-product entities, replacing the fixed capital clause with a more flexible, consultative framework. It introduces a differential licensing regime to support micro and niche insurers—with a minimum capital of ₹50 crore on a case-by-case basis—in serving low-income and rural populations. It also paves the way for captive insurers, allowing conglomerates to establish in-house insurers to manage group-level risks. In an earlier conference, M. Nagaraju, financial services secretary, had said the new insurance laws would attract global investors, foster competition, enhance product quality, improve customer service, and lower premiums, bringing India on par with economies like Canada, Brazil, Australia, and China. But C.R. Vijayan, former secretary general of the General Insurance Council, a representative body of general insurers, said though the reform measures signal a liberal investment climate, investors will judge it by the sector's long-term returns over a decade or more. 'Long-term returns entail higher risk for investors, especially given the potential impact of a change in government and its implications on investment policies." Corporate reforms While the IBC amendments under discussion mainly seek to clarify legislative provisions in light of certain judicial pronouncements and to make the law more efficient, the proposed Companies Act amendments are based on an expert committee's suggestions for modifying the regulatory framework for statutory auditors and improving the ease of doing business. Bankruptcy law experts said that while further legislative streamlining of the IBC is awaited, all stakeholders should strive for timely decision-making and ensure the sanctity of the debt resolution process. Also read | Indian insurtech startups look overseas as AI reshapes global insurance 'The stakeholders need to develop and follow the right practices in insolvency resolution processes. The regulatory authorities should honour the IBC principles and should not leverage their position as a regulator to recover the dues during the moratorium period," said Anoop Rawat, partner (Insolvency and Bankruptcy) at law firm Shardul Amarchand Mangaldas & Co.
Economic Times
15-05-2025
- Business
- Economic Times
Axis Max Life Insurance plans to list its stock directly
Mumbai: Axis Max Life Insurance plans to list its stock directly as soon as federal lawmakers pass the relevant amendment bill, managing director Prashant Tripathy said, as doing so would simplify the ownership structure and boost transparency. "We are very optimistic," Tripathy said in an interview. "All stakeholders, regulators, shareholders, promoters and management are aligned. Once the bill is cleared, hopefully in the monsoon session, we will act immediately." ADVERTISEMENT Axis Max Life, currently owned jointly by Axis Bank and Max Financial Services, operates under a quasi-listed structure, where the parent companies are publicly traded but the insurance business is not directly listed. Tripathy said the structure is "suboptimal" and that collapsing it into a single listed entity would create better visibility and investor confidence. The move comes amid a regulatory push to bring more insurers to the public markets to improve governance and deepen investor participation. The Insurance Laws (Amendment) Bill, once approved, is expected to ease listing norms for companies like Axis Max Life. While preparing for its public debut, Axis Max Life is focusing on growth well above the industry average. For FY25, the company reported a 20% increase in total new business, compared with 15% for the private life insurance insurer has delivered 18% compound annual growth over the past two years, double the industry average, Tripathy said."We aim to grow 300 to 400 basis points ahead of the private sector this year as well," he added. In April, the insurer posted a 24% rise in new business, compared to 2% for the rest of the private industry. ADVERTISEMENT One basis point is a hundredth of a percentage point. The company's proprietary distribution channels grew 30% in the last fiscal year, while bank-led channels expanded 13%. Axis Max Life's market share in the private life space now stands at 9.8%, up 37 basis points. Axis Bank entities, which own close to 19.99% in the insurance company, have seen contribution to the business income fall to 10-11%. Tripathy said, the insurer is expecting it to pick up to 14-15%. ADVERTISEMENT Axis Max Life is targeting value of new business (VNB) margins in the range of 24-25%, balancing profitability with growth. "Our stated position has always been to work with target margins and then drive growth. We're not trying to be a 27-28% margin company. Our margin corridor is between 24-25%, and then we focus on growth. We landed at 24%. Hopefully, if we do better margins, our VNB growth will be more than the sales growth. About 24-25% is the corridor," Tripathy insurer has implemented deferred commission structures to increase persistence following regulatory changes around agent incentives, avoiding clawbacks. ADVERTISEMENT The approach, Tripathy said, has been tailored by agent performance and is consistent across individual and corporate agencies. The non-PAR segment, which slowed down last year, is expected to pick up. "My expectation is that non-PAR will also be start to grow, especially from our side. We sold more ULIPs last year, and of the total mix of about 46% were ULIPs. This year, non-par should increase by 3-4% and par should increase," he said. ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
15-05-2025
- Business
- Time of India
Axis Max Life Insurance plans to list its stock directly
Axis Max Life, currently owned jointly by Axis Bank and Max Financial Services, operates under a quasi-listed structure, where the parent companies are publicly traded but the insurance business is not directly listed. Tripathy said the structure is "suboptimal" and that collapsing it into a single listed entity would create better visibility and investor confidence. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: Axis Max Life Insurance plans to list its stock directly as soon as federal lawmakers pass the relevant amendment bill, managing director Prashant Tripathy said, as doing so would simplify the ownership structure and boost transparency. "We are very optimistic," Tripathy said in an interview. "All stakeholders, regulators, shareholders, promoters and management are aligned. Once the bill is cleared, hopefully in the monsoon session, we will act immediately."Axis Max Life, currently owned jointly by Axis Bank and Max Financial Services , operates under a quasi-listed structure, where the parent companies are publicly traded but the insurance business is not directly listed. Tripathy said the structure is "suboptimal" and that collapsing it into a single listed entity would create better visibility and investor move comes amid a regulatory push to bring more insurers to the public markets to improve governance and deepen investor participation. The Insurance Laws (Amendment) Bill, once approved, is expected to ease listing norms for companies like Axis Max preparing for its public debut, Axis Max Life is focusing on growth well above the industry average. For FY25, the company reported a 20% increase in total new business, compared with 15% for the private life insurance insurer has delivered 18% compound annual growth over the past two years, double the industry average, Tripathy said."We aim to grow 300 to 400 basis points ahead of the private sector this year as well," he added. In April, the insurer posted a 24% rise in new business, compared to 2% for the rest of the private basis point is a hundredth of a percentage company's proprietary distribution channels grew 30% in the last fiscal year, while bank-led channels expanded 13%. Axis Max Life's market share in the private life space now stands at 9.8%, up 37 basis points. Axis Bank entities, which own close to 19.99% in the insurance company, have seen contribution to the business income fall to 10-11%. Tripathy said, the insurer is expecting it to pick up to 14-15%.Axis Max Life is targeting value of new business (VNB) margins in the range of 24-25%, balancing profitability with growth. "Our stated position has always been to work with target margins and then drive growth. We're not trying to be a 27-28% margin company. Our margin corridor is between 24-25%, and then we focus on growth. We landed at 24%. Hopefully, if we do better margins, our VNB growth will be more than the sales growth. About 24-25% is the corridor," Tripathy insurer has implemented deferred commission structures to increase persistence following regulatory changes around agent incentives, avoiding approach, Tripathy said, has been tailored by agent performance and is consistent across individual and corporate non-PAR segment, which slowed down last year, is expected to pick up. "My expectation is that non-PAR will also be start to grow, especially from our side. We sold more ULIPs last year, and of the total mix of about 46% were ULIPs. This year, non-par should increase by 3-4% and par should increase," he said.
