The Insurance Laws (Amendment) Bill that is set to be tabled in the Upper House of the Parliament in the next few days is not just about raising the foreign direct investment limit in the sector to 49% from 26%. Here are some of the finer aspects of the Bill:
1) Gives power to SAT: The Insurance Bill provides that companies whose registrations were rejected by the Insurance Regulatory and Development Authority (Irda) can approach Securities Appellate Tribunal (SAT) for redressal of their grievances. They could also take this route against penalties imposed by Irda.
Earlier, the insurers had to approach the High Court or the central government for these purposes.
2) Agents can work for multiple insurers: The act has proposed that an insurance agent can also work with a monoline insurance company, apart from one life, one non-life and one standalone health insurer
3) Policyholders can get a claim passed after three years of it being issued even if the insurer claims it is fraudulent. Earlier, insurers could reject claims if it was fraudulent after two years of the issue of the policy.
4) No abrupt closure or shifting of branch offices: While Irda permission is required for changes in branches, the Bill proposes that customers should not be inconvenienced due to abrupt closing or shifting of branches in any area.
5) Higher penalties for operating without license in insurance space: The Bill proposes a higher quantum of penalty running into Rs 5 crore-10 crore for individuals or companies who act as insurer or distributor of insurance policies without being registered with Irda.