There are expectations that composite licences may be permitted by amending Insurance Act
NEW DELHI: Life Insurance Corporation (LIC) on Friday said there is “no formal proposal” for entering into the health insurance space.
Currently, life insurers are not allowed to underwrite health insurance policies. Such policies are sold by general insurer or standalone health insurance companies.
“We hereby clarify that at present, no such formal proposal (for health insurance via private health insurer) has been initiated,” LIC said in a regulatory filing.
However, it said, “the Life Insurance Corporation of India evaluates and explores various strategic opportunities in the ordinary course and also inorganic options for growth and expansion of its business, including strategic partnerships and investment opportunities”.
There are expectations that composite licences may be permitted by amending the Insurance Act.
As per the Insurance Act, 1938, and the regulations of the Insurance Regulatory Development Authority of India (Irdai), composite licensing for an insurer to undertake life, general, or health insurance under one entity is not allowed.
In February, a parliamentary panel suggested the introduction of a composite licence for an insurer to undertake life, general, or health insurance under one entity to increase the penetration of insurance in the country.
The panel headed by BJP leader Jayant Sinha suggested the government to introduce a provision of composite licensing for insurance companies and make the related amendment in legislation at the earliest.
Observing that allowing composite licensing could provide further impetus to the insurance sector, owing to its various benefits, the report had said it can cut costs and compliance hassles for insurers, as they can run different insurance lines under one roof.
It can also offer customers with more choice and value, such as a single policy that covers life, health, and savings, the report tabled in Parliament had said.
It can boost insurance reach and awareness in India, as customers can get one insurance from one provider, with lower premiums and easier claims.
The committee is aware that to enable composite licensing in India, the government and Irdai are planning to bring amendments to the existing insurance legislation, it had said.
