The insurance sector in India is undergoing one of its most significant phases of reform. With an ambitious goal of achieving “Insurance for All” by 2047,
the government is implementing wide-ranging measures to expand access, strengthen regulation, and simplify products. In an interaction with ET Now’s Insurance Mantra, Dr. Prashant Kumar Goyal, Joint Secretary, Department of Financial Services (DFS), outlined the government’s reform roadmap and shared insights on affordability, regulation, fraud, and the future of public sector insurers.
Insurance for All
The government has set a long-term vision of universal insurance coverage.
“Insurance for all by 2047 means taking insurance to every citizen of the country — life, health, and property. The government wants to work on all three areas and ensure comprehensive coverage,” Dr. Goyal explained
To achieve this, IRDAI has been simplifying regulations, moving towards principle-based guidelines, and allowing “use and file” products to make it easier for insurers to launch offerings. The focus, he said, is on ensuring that insurance becomes accessible, affordable, and available for everyone.
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Insurance Act Amendment – A Game Changer
A major legislative change in the works is the amendment of the Insurance Act, 1938. Dr. Goyal called it a transformative step.
“The basic purpose of amending the Insurance Act is to align it to the present realities. More powers are being given to IRDAI. Earlier, many provisions were codified into the Act. Now we are moving them into the domain of regulation-making, keeping only the core principles in the Act,” he noted .
The amendments will:
• Allow composite licences for companies to offer both life and general insurance.
• Introduce perpetual registration for brokers and intermediaries.
• Enable insurers to provide value-added services alongside insurance.
• Give IRDAI greater regulatory flexibility, particularly in investment norms.
• Facilitate 100% FDI in line with Budget 2025 announcements.
“If all these proposals go through, the industry may be looking at a completely different and better scenario,” Dr. Goyal said.
GST Rationalisation to Improve Affordability
Affordability has been one of the biggest challenges to insurance penetration. rationalisation of GST on insurance premiums will be a “game changer.”
“When we levy 18% GST, it straightaway increases the cost. If GST is reduced, whether to 0% or 5%, it will directly benefit customers. Anyone paying ₹118 today would pay much less. As affordability improves, the tendency to adopt insurance will also rise,” he pointed out
This will particularly benefit the “missing middle” — people who are not covered under government schemes but find retail policies costly. “Reducing GST is a very big decision to cover the missing middle. More people will be incentivised to adopt health insurance,” he added
Cashless for All and the National Health Claim Exchange
Improving hospital–insurer coordination is another priority.
“Patients often face delays in approvals or discharges and end up paying in cash. IRDAI has now mandated pre-authorization within one hour and final discharge approval within three hours. This will strengthen the cashless system,” he said
To further streamline processes, the government is working on the National Health Claim Exchange (NHCX), a single digital platform for claims.
“Today every insurer works on a different platform. Hospitals tied up with four insurers must log in separately to four portals. With NHCX, they can file claims on a single portal for all insurers. It will bring transparency, reduce transaction costs, and speed up claim settlement,” he explained
Revival of PSU General Insurers
“Our aim is to make PSU insurers financially strong and competitive with private insurers. Oriental Insurance has been consistently posting profits, and United India was in profit last year. Though there were temporary losses in Q1, we expect all PSUs to be in profit by Q3 and Q4,” he said
DFS has been closely monitoring their performance, setting targets in consultation with management. “For 2025–26, we expect all public sector insurers to be profitable for the full year,” he said
Curbing Mis-Selling and Fraud
Mis-selling and fraud remain key challenges. Dr. Goyal admitted that mis-selling is a concern but said regulators are tackling it.
“Mis-selling is often due to intermediaries or agents not explaining products properly. But IRDAI is serious about it, and we are seeing a decrease in complaints,” he noted
On fraud, he added: “Fraud is a big risk factor. Insurers are using databases like IIB and advanced software to detect inflated hospital bills or fake claims. Stronger KYC norms are being implemented to ensure benefits reach the right people.”
Simplification of Products
Complexity in insurance products often deters consumers. To address this, IRDAI has mandated customer information sheets.
“Every policy now comes with a customer information sheet listing features, exclusions, limits, and sub-limits in simple terms. If implemented properly, this will remove information asymmetry and help customers make informed decisions,” Dr. Goyal said
Flagship Schemes – PMJJBY and PMSBY
The government’s flagship schemes — PM Jeevan Jyoti Bima Yojana (PMJJBY) and PM Suraksha Bima Yojana (PMSBY) — have seen massive enrolments over the past decade.
“These schemes were launched to provide basic life and accident cover at very low premiums. Active enrolments are over 35 crore, and cumulative enrolments have crossed 53 crore,” Dr. Goyal said
He highlighted the ongoing three-month awareness campaign: “We are organising camps in every village and urban body. Banks, local administration, and representatives are participating, and we are seeing healthy enrolment.”
Fraud Prevention and Trust Building
Dr. Goyal underscored the need for insurers to build trust. “Insurance is a social safety network. Companies must proactively reach policyholders, resolve grievances quickly, and build trust. Only then will people who hesitate today come forward to buy insurance,” he said
He emphasised that tackling fraud, simplifying communication, and ensuring quick grievance redressal are essential to growing the sector.
Insurance Mantra | Insurance for All by 2047! Govt’s big mission decoded — GST relief, reforms & more. How will it impact consumers’ premiums & affordability? Prashant Kumar Goyal, Joint Secy, DFS, explains.
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