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News: Insurance Regulatory and Development Authority (IRDAI) has set up a high-powered committee led by Dinesh Khara, former Chairman of the State Bank of India (SBI).
About the Dinesh Khara Committee
- The Dinesh Khara Committee is a high-powered committee formed by the Insurance Regulatory and Development Authority of India (IRDAI) to review the Insurance Act, 1938 and suggest necessary amendments.
- Aims: It aims to align the Act with modern insurance industry needs and boost foreign investment.
- Purpose of the Committee
- To scrutinize various aspects of the Insurance Act, 1938.
- To recommend amendments to improve insurance penetration and attract investments.
- To align insurance laws with modern economic and regulatory requirements.
- To support the government’s proposal of allowing 100% foreign direct investment (FDI) in the insurance sector.
- Members of the Committee: The seven-member panel includes:
- Dinesh Khara – Former Chairman of State Bank of India (Chairperson of the Committee).
- NS Kannan – Former MD & CEO of ICICI Prudential Life Insurance.
- Girish Radhakrishnan – Former CMD of United India Insurance.
- Rakesh Joshi – Former Member of IRDAI.
- Saurabh Sinha – Former Executive Director of RBI.
- Alok Misra – MD & CEO of MFIN (Microfinance Institutions Network).
- L Vishwanathan – Legal expert.
Key Recommendations
- Increase in FDI Limit: Allow 100% foreign direct investment (FDI) in the insurance sector.
- Composite Licences: Permit insurers to operate in multiple insurance categories under a single licence.
- Differential Capital Requirements: Adjust capital requirements based on business size and risk exposure.
- Reduction in Solvency Norms: Modify solvency margin requirements to improve insurer efficiency.
- Captive Licences: Introduce captive insurance licensing for businesses to self-insure risks.
- Investment Regulations: Review investment and repatriation rules for foreign insurers.
- One-time Registration for Intermediaries: Simplify regulatory processes for insurance brokers and intermediaries.
- Distribution of Financial Products: Allow insurers to sell other financial products.
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