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The government sought from the industry for large business, including tying the overall licensing arrangement, may restrict the Insurance Act (Amendment), 2022 may also prevent.
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The Insurance Council (GIC), a body of non-life insurers, has opposed the Finance Ministry's move to appoint a representative of the central government to the executive committees of both the Life Insurance.
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In its written submission on the proposed amendments, the GIC has stated that both the umbrella bodies are self-regulated institutions and may hamper their autonomy as designated by the government.
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“At present, both the councils are self-regulated institutions as per the amended Insurance Act, 2015. The move to appoint a representative of the central government deprives both the councils of their autonomy.
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Lastly, both the Councils are not dependent on funds from the Ministry for their functioning and are doing their work as far as possible without taking funds from the Authority/Government.
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There is also no requirement for a representative of the Central Government to sit on the Executive Committee (EC) of both Life and the General Council.
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In the proposed amendment, the government has suggested that each council also include a representative of the central government on their executive committees.
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This is a very powerful hook for life insurance companies to persuade people to buy life insurance.
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The 80C bucket is currently filled by payment of life insurance premium, tax-saving fixed deposits, employees' provident fund and other items.