Passage of Insurance Bill remains an unfulfilled dream this year

The insurance industry, which has been hit by money laundering allegations, is looking for the revival of the economy for a pick up as elusive political consensus continues to hold up the raising of foreign investment limit in the sector.

Lack of political consensus kept the long pending Insurance Bill a pipe-dream in a year that saw allegations of money laundering being levelled against some operators, an increase in investment exposure and the industry's continuous fight against the slowdown.

It expects that the regulatory moves to allow banks to act as insurance brokers in 2014 may give a leg up to growth.

Sectoral regulator Insurance and Regulatory Development Authority (Irda), however, may not issue any more major regulatory guidelines in the coming year.

"Currently we have sort of reached a plateau on regulation making and we are looking for implementation of these in true spirit especially about the TPAs and how the customer is treated. All most all regulations are in place," Irda Chairman T S Vijayan said.

The government, despite putting much effort to get the Insurance Bill that seeks to raise foreign investment limit to 49 per cent from the existing 26 per cent, might gather support of the opposition.

The government had introduced the Bill in the Rajya Sabha in December 2008 to improve and revise laws relating to the sector in the wake of private participation.

The insurance amendment Bill is an omnibus legislation to change parts of three Acts: Insurance Act, 1938; Insurance Regulatory and Development (Irda) Act, 1999, and General Insurance Business Nationalisation Act.

Meanwhile, during the year, there were allegations levelled against three life insurance companies for money laundering in connivance with leading private banks -- ICICI Bank, HDFC Bank and Axis Bank.

Some officials of HDFC Bank, ICICI Bank and Axis Bank, a sting operation alleged, had offered to launder unaccounted money through insurance schemes. Irda had sought explanations from CEOs of three life insurance companies -- HDFC Life, ICICI Prudential Life and Max Life.

That apart, Irda has proposed - subject to RBI approval - to allow banks to act as brokers and sell products of more than one insurer so as to increase the penetration of the sector across the country.

"We expect these new regulations to lead to much deeper penetration and enhanced distribution for the life insurance industry in general, thereby contributing to a greater sense of security for all Indians, and also serving important long-term economic objectives for the nation," Reliance Life Insurance CEO Anup Rau said.

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