Reacting to the invoice’s introduction in Parliament, LIC, CEO & MD, R Doraiswamy described it as a landmark reform aligned with the broader imaginative and prescient of a “Viksit Bharat”. “It has been an ideal landmark invoice that Authorities of India has launched as we speak for amending the insurance coverage act LIC Act and IRDAI Act. It’s a nice step ahead in the direction of making India a Viksit Bharat in the direction of which the insurance coverage business has taken the target of insurance coverage for all by 2047,” he mentioned, including that the laws may considerably broaden insurance coverage penetration throughout the nation.
One of many key takeaways from the invoice is the absence of any provision on open structure for particular person brokers — a problem that had sparked intense debate in current months. In line with Doraiswamy, this omission comes as a aid, particularly for LIC, which has persistently raised considerations in regards to the practicality of open structure in a market crowded with merchandise.
“It’s a nice step. You’re conscious that LIC has been expressing its views on open structure and particular person brokers for fairly a while,” he mentioned, emphasising that the main target was all the time on buyer curiosity moderately than organisational comfort. With dozens of insurers and an unlimited array of merchandise, Doraiswamy argued that anticipating particular person brokers to grasp choices throughout firms could be unrealistic and probably detrimental to prospects.
LIC’s agency-driven mannequin stays central to its enterprise. Practically 92.5% of its particular person new enterprise insurance policies come via brokers, supported by a community of round 14.7 lakh brokers nationwide. Doraiswamy additionally underlined the employment angle, noting that increasing agent recruitment may assist job creation at a time when the economic system wants it most.
The invoice, nonetheless, has left some questions unanswered — significantly round composite licences. LIC has earlier indicated curiosity in getting into the medical health insurance area, however the proposed laws doesn’t explicitly handle composite licensing. Clarifying LIC’s place, Doraiswamy mentioned the company’s strategy has all the time been strategic moderately than operational.
“No, we’ve got been a foray into medical health insurance solely as a strategic investor,” he mentioned, explaining that LIC is exploring the opportunity of taking a strategic stake in a standalone well being insurer. Such a transfer, he famous, wouldn’t essentially require a composite licence and will proceed with applicable regulatory approvals. Importantly, he harassed that there was no change in LIC’s plans following the tabling of the invoice.One other important side of the laws is the improved position of the Insurance coverage Regulatory and Growth Authority of India (IRDAI), significantly with respect to commissions and remuneration. Doraiswamy downplayed any disruptive affect on LIC, declaring that the insurer has traditionally adopted conservative and compliant fee practices.
“As you might be conscious, LIC has all the time been a very compliant organisation and we’ve got been nearly setting the benchmark for the business in lots of areas,” he mentioned. He added that empowering IRDAI to border or tighten laws on commissions would in the end serve buyer pursuits, a precept LIC strongly helps.
As parliamentary discussions on the invoice unfold, insurers are watching carefully for additional readability. For LIC, the reforms promise better autonomy and regulatory certainty, whereas reinforcing its long-held perception in a customer-first, agent-led insurance coverage mannequin. If applied successfully, the amendments may mark a decisive step in the direction of the objective of common insurance coverage protection in India by 2047.
