Finance Ministry proposes issuance of one licence for all kinds of insurance

Finance Ministry on December 1 proposed the issuance of one licence for all kinds of insurance for new as well as existing insurance companies.

The composite licence will facilitate open access for insurers in any line of business. Such insurers will be allowed to enter any segment -- life, health, general.

Insurers can also apply for any subclass of business like motor, health, and accident.

Also Read| Approval for 18 insurance companies in pipeline: IRDAI chief

CNBC TV-18 was the first publication to report, on August 3, that government is considering the issuance of a composite license for all insurers.

Insurance regulator Insurance Regulatory and Development Authority (IRDAI) is in favour of issuing composite licenses, IRDAI Chairman Debasish Panda told CNBC-TV18 in an interview, recently.

Panda said that the last approval for a new insurance company was granted in 2017, "... and after five years today, we have approved insurance company by the name Kshema General Insurance and there's another one, which is ready. We couldn't bring that proposal because their arrival of the capital will take another 15 days, it's in the pipeline... We hope in the next board (meeting) it should also get cleared and 18 more are in the pipeline."

This issuance will require an amendment in the Insurance Act and Parliament's approval.

Currently, insurers need separate licences for life, general and standalone health insurance business.