Lok Sabha on 4 March 2015 passed the Insurance Laws (Amendment) Bill, 2015 by voice vote. The Bill will replace the Insurance Laws (Amendment) Ordinance, 2014.
The Ordinance amends the Insurance Act, 1938 (the Act), the General Insurance Business (Nationalisation) Act, 1972 and the Insurance Regulatory and Development Authority (IRDA) Act, 1999.
The Bill was introduced in Lok Sabha on 3 March 2015.
Provisions of the Bill
• It seeks to remove archaic provisions and incorporate modern day practices emerging in a changing dynamic environment, which includes private participation.
• It hikes Foreign Direct Investment (FDI) cap in the insurance sector to 49 percent from present 26 percent.
• It calls for establishment of Life Insurance Council and the General Insurance Council. They will act as self-regulating bodies for the insurance sector.
• It allows PSU general insurers to raise funds from the capital market.
• It also provides for increased penalty for those who deter multilevel marketing of insurance products like imprisonment of up to 10 years for selling policies without registration with the insurance regulator.
• It prohibits an insurer from challenging the life insurance policy on any ground after a period of three years of selling it.
What: Passed by Lok Sabha
When: 4 March 2015