The long-awaited insurance laws amendment bill is set for a smooth passage during the ongoing parliament session with the Congress backing the key reforms measure.
Top sources added that the Centre has agreed to address the “two-three key concerns” of the Congress in return of their support.
On Tuesday, at the meeting of the Select Committee that is reviewing the bill, the Trinamool staged a walk out, the Left and JD(U), according to sources have almost reconciled to put dissent notes to the panel report even as the Congress suggested some additional safeguards to the government on the legislation.
Sources added that the Congress wants rules to clearly define Indian ownerships and control in insurance companies in the wake of entry of enhanced foreign investment in the sector. The party has also opposed the Centre’s move to allow an insurance company to start business with Rs 50 crore as capital. It wants, along with other Opposition parties, that the initial capital should be at least Rs 100 crore for an insurance firm.
“Some members have raised some concerns and we will try to incorporate them in our report. I will prepare the draft report by December 8 and after the panel approves it, it will be tabled in the House quickly,” said said Chandan Mitra, chairman of the Select Committee on the bill.
Former UPA minister Anand Sharma (Congress) and P Rajeev (CPIM) were most vocal in the meeting that started the discussions on different clauses of the bill. Trinamool Congress’ Derek O’Brian alleged that the note circulated for discussion was “faulty” before walking out of the meeting.
A large section of the Opposition is also seeking strict regulations for foreign investors to ensure that increase in the share of foreign investors translate into fresh capital and more fund.
India’s private insurance industry needs an estimated $6 billion or about Rs 36,000 crore of additional capital over the next five years
Life insurance penetration, defined as the ratio of premium underwritten in a given year to the GDP, is about 3.17% of GDP in India, lower than more than 10% in Japan and about 6% in Australia.
Of the 24 life insurance companies in India currently, only 17 of them reported profits in the last fiscal year
Rising costs of hospitalisation, especially in private hospitals, demonstrates the need for increasing insurance penetration in India, for which companies need additional capital.