Insurance Mahakumbh: Over the past year, the government of India has taken several reforms in the insurance sector, starting from GST rationalisation to amendments in the Insurance Act.
Several important reforms have been introduced by the government until now. Let's get some insights from Secretary, Department of Financial Services, M Nagaraju, on what's next for the sector, the common man & impact of 100% FDI.
100% foreign direct investment (FDI)
Over the last year, the Government of India has taken several transformative measures, including major reforms in the insurance sector. This includes provisions for 100% foreign direct investment (FDI) and the creation of institutional mechanisms within the regulator. It aims to make the insurance sector more affordable, accessible, and accountable.
Vision for Insurance for All by 2047
Insurance for All by 2047" is part of the broader vision of a developed India. It lays down a comprehensive roadmap for the future. This vision covers not only individuals but also institutions, infrastructure, and assets. It includes all segments-health, non-health, marine, property, and vehicles. While 2047 may seem far away, we are already in 2026, leaving just about 20 years. In the life of a nation, 20 years is a short period, said DFS M Nagaraju.
Read more: Navigating Uncertainty: ET NOW SWADESH brings together industry leaders at 'Insurance Mahakumbh' today, April 18
Mis-selling in Insurance Products
M Nagaraju highlighted that we must prepare the sector to achieve universal insurance coverage. He further added, The amended Insurance Act has been passed by Parliament. Systems are being developed to track insurance products and measure coverage. Efforts are also being made to ensure the transparent selling of insurance products. Preventing mis-selling is a key priority, and the regulator has been given responsibility for this.
To address mis-selling, the government has taken steps-especially in public sector banks-such as removing incentives for selling insurance products and excluding them from performance evaluation.
A free-look period has also been introduced, allowing customers to return items within one month if dissatisfied. These measures have significantly reduced mis-selling complaints.
What is free look period?
A free look period is usually a 15 to 30-day, consumer-friendly window after receiving a new insurance policy (life or health) to review its terms. Policyholders can cancel the policy, return it, and receive a refund (minus nominal charges for medical exams/stamp duty) if they are dissatisfied
Bank Assurance as a Key Channel
Bank assurance has become an important channel for insurance penetration. In the past five years, premiums collected through banks have doubled. Banks have a wide reach and enjoy public trust, making them a preferred channel for financial products, including insurance.