The General Insurance Council (GIC), the grouping of non-life insurers, has opposed the move by the Finance Ministry to appoint a central government representative to the executive committees of both Life Insurance Council and GIC, as proposed in the Insurance Amendment Bill.
In its written submission on the proposed amendments, GIC has said both umbrella bodies are self-regulated institutions and government nominees may hamper their autonomy.
“Currently, both the Councils are self-regulated institutions as per the Amended Insurance Act, 2015. The step of appointing a Central Govt representative deprives the autonomy of both the Councils. Finally, both the Councils do not depend on funds from the ministry for their functioning and have been doing their work to the extent possible without taking funds from the authority/government. Hence, it is felt that there is no need for a central government representative to sit in the executive committee (EC) of both the Life and General Councils,” GIC wrote to the finance ministry in its submission on the bill.
In the proposed amendment, the government has suggested that each council shall consist one representative of the central government in their executive committees.
The Finance Ministry in the proposed amendment to the insurance laws changed the constituent of the executive committee of Life Insurance Council and General Insurance Council. The number of the members in the committee of each council were also increased.
It has suggested that the councils have seven representatives elected in their individual capacity by firms that are members of the council; two eminent persons not connected to the insurance business, nominated by the regulator; three persons to represent insurance agents, intermediaries and policyholders, respectively; and, one representative of the central government. Further, there will be one representative each from self-help groups and insurance co-operative societies.
Last November, the finance ministry invited comments on the proposed amendments to the Insurance Act,1938.
In the amendment, the Centre proposed granting insurers a composite licence to allow them to sell different financial products, and increasing the retirement age of the chairman and whole-time members of the Insurance Regulatory and Development Authority of India (Irdai).
The Department of Financial Services has also suggested allowing insurers to operate in multiple lines of business — general, life, and health — without having to seek separate licences from the regulator for each business, provided they meet the minimum capital requirements.