The RBI will now charge banks different deposit insurance fees based on how risky they are, allowing safer banks to pay less premium.
The exemption of individual life and health insurance premiums from the Goods and Services Tax (GST) enables the insurance industry to make products affordable and attractive, said Ajay Seth, chairman of Insurance Regulatory and Development Authority of India (Irdai) at the Business Standard BFSI Insight Summit 2025.
While the economy will wait for a rate cut in December, the banking industry should be happy with the wave of liberalisation -- a big push for growth in bank credit, points out Tamal Bandyopadhyay.
'The government is putting insurance in the same category as food, which is essential for life.' 'Now this is an opportunity for the sector to focus on the consumer.'
'The kind of reach it has with so many bank branches even in the remotest part of the country, it is one channel which will play a very important role in vision of insurance for all.'
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'The banks cannot pass on the hike in premiums to its customers, according to the norms. The premium won't go up substantially in any case and may be hiked to 12-13 paise (per deposit of Rs 100 a year),' Finance Secretary Rajiv Kumar said.
Life insurers, on the prodding of global reinsurers, are set to hike premiums on term plans because rising mortality after the second wave of the pandemic has led to an increase in the number of settlements. Some will do so next month while others may wait till January. Global reinsurer Munich Re had nudged its insurance partners on the hike in September and insurers have been engaged in negotiations with the reinsurer on the amount of the increase. Term plan prices in India were among the lowest in the world for a long period but in the past couple of years, they have been increased a few times.
'If you want it to grow well and serve the true needs of the economy, it needs a lot of freedom and flexibility, which comes in terms of the reform objective set by the regulator.'
'Clearly, the depositors of cooperative banks need the maximum protection.'
'The new ceiling will cover around 93 per cent of all deposit accounts, up from 90 per cent earlier,' notes Tamal Bandyopadhyay.
India has received nearly Rs 30,000 crore worth of FDI in the private sector insurance firms since 2015, when the government had increased FDI limit from 26 per cent to 49 per cent. Investment under the automatic route does not require prior approval from the government.
The Insurance Regulatory and Development Authority of India (IRDAI) has issued guidelines that will allow car dealers to become Motor Insurance Service Providers (MISP) and offer the policies of multiple general insurers, says Sanjay Kumar Singh.
The regulator has made it mandatory for insurers to have a minimum percentage of motor third-party business underwritten.
Banks and insurers are beginning to reward customers who show exemplary conduct with lower prices and penalise those who behave poorly by imposing higher costs.
Beneficiaries to get hospitalisation cover up to Rs 30,000.
The Insurance penetration in India is very low at 3.9 per cent.
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