Life Insurance Corporation of India (LIC) CEO R. Doraiswamy on Tuesday welcomed the government’s proposed Insurance Bill, calling it a landmark reform
that could significantly strengthen insurance penetration and support the goal of “insurance for all” by 2047. Speaking exclusively to ET Now, Doraiswamy said the bill marks a major step towards building a “Viksit Bharat” by expanding coverage and empowering the insurance regulator. The proposed legislation seeks to amend key laws governing the sector, including the Insurance Act, LIC Act and IRDA Act. Doraiswamy said the reforms would help ensure wider insurance coverage across the population in the coming years. “A lot of steps have been taken, and I’m sure this bill will go a long way in ensuring that we cover the entire population with adequate insurance cover,” he said. Addressing speculation around LIC’s plans to enter the health insurance segment, Doraiswamy clarified that the insurer’s strategy remains unchanged despite the absence of provisions related to a composite licence in the bill. He said LIC has been exploring a foray into health insurance only as a strategic investor, rather than as a composite insurer. “We were looking at taking a strategic stake in a standalone health insurance company, and that can still happen irrespective of whether a composite license is allowed or not,” Doraiswamy said. He added that while certain regulatory and government approvals may be required, the plan does not hinge on changes to licensing norms. LIC, he said, continues to evaluate opportunities and has not fixed any immediate timeline for such an investment. Doraswamy also noted that further clarity would emerge as the bill is discussed in Parliament and once it is passed. He said the enhanced powers proposed for the Insurance Regulatory and Development Authority of India (IRDAI) would allow the regulator to frame regulations that could take the industry forward in a significant way. On concerns around the bill empowering IRDAI to regulate commissions, rewards and remuneration structures, the LIC chief said the move would not materially impact the state-owned insurer. He stressed that LIC has historically maintained a conservative and compliant approach to commissions. “LIC has never followed a very high commission structure. We have always had steady commissions for policies sold through intermediaries,” he said. Doraswamy added that LIC’s practices have often served as benchmarks for the industry, even predating the formation of IRDAI. Any regulatory move to cap commissions or remuneration, he said, would ultimately be in the interest of policyholders. Meanwhile, the government is expected to table the Insurance Act amendment bill in the Winter Session of Parliament. The proposed changes include removing minimum paid-up capital requirements and allowing insurers to operate across multiple classes of insurance, potentially reshaping India’s insurance landscape, which currently comprises 27 life insurers, 25 general insurers and seven standalone health insurers. Also Read: Bill for Insurance Act Amendment in Winter Session? Why it is a significant move - Decision details
(Interviewed by Anurag Shah; Written by Daksh Grover)
