growth or high sales volume during 2015. However,
thanks to a few crucial factors that steadied the
sector, insurance firms were able to ride out their
cash crunch and brace themselves to offer new
products in 2016. Here are some of the major reforms
that the sluggish sector witnessed in 2015.
Insurance Laws (Amendment) Bill, 2015
With the passing of the Insurance Laws
(Amendment) Bill 2015, the sector witnessed a fresh
inflow of capital, eliminating the cash crunch that
most insurance companies were facing. With an
approval of 49 per cent direct foreign investment in
the sector, new players are likely to enter the
market in the near future. The consolidation of the
insurance market means more products and offers for
consumers to choose from.
Mis-selling now a thing of the past
One big problem almost everyone faced while buying
insurance was the rampant mis-selling. With the
passing of the Insurance Laws (Amendment) Bill,
2015, a penalty clause fining insurance companies up to
Rs 25 crore for mis-selling was announced.
With Insurance Regulatory and Development Authority
(IRDA) getting more powers to ensure that
consumers protection remains paramount, one can now
buy insurance without worrying about being sold a
plan that offers no benefits.
Amended discharge vouchers rule
Earlier signing on a discharge voucher nullified a
consumer’s right to complain against denial of adequate
claims in the past. Not anymore, as the IRDA has
ensured that even if a consumer signs on a discharge
voucher he/she can still retain the right to challenge
the claim denial in a court of law. This is an added
privilege for policy holders.
Increasing use of technology
The role of technology has brought about a major
change in the sector. Insurers are now using
technology to track all its potential claims, thereby
speeding up claim verification. With insurance companies
relying more on technology thereby lowering their
manpower requirements, it helps them to reduce their
costs.
Professional indemnity plans
Professional indemnity plans were not as popular in
India as compared to other countries. With an
increase in financial awareness and easy availability of
professional indemnity plans, there has been a
substantial increase in the number of professionals
opting for such plans.
Likely reforms in the insurance sector in 2016.
The current year is likely to witness many more
reforms. Here is a look at what is in store for the
consumers. The universal health insurance plan: The
government is working on the modalities to announce
a new universal health insurance plan.
The plan is likely to cover cashless hospitalisation and coverage for pre-existing diseases after a waiting period of around 2 years, all with a nominal premium payment.
There are also talks of the government coming out with a
consolidated cover for the universal health plan for
the entire family with a single sum insured.
Health insurance to witness innovative product line:
With rising medical care costs and inflow of new
insurance companies after relaxation of FDI norms, a
host of new and innovative health insurance plans are
likely to be in the offing. Life stage based plans, city
based plans, and many new innovative products are
being contemplated by various insurance companies to
tap the health insurance market.
Customised insurance: Consumers may soon be able to
purchase a custom made insurance plan, considering
specific needs and financial plans, rather than a one-
for-all plan. From life insurance to general insurance,
just about every insurer is now open to the idea of
offering a customised insurance plan based on certain
fixed parameters and guidelines.
The insurance sector is now looking forward to a
rejuvenated 2016, after getting a positive impetus in
2015. As an insurance seeker, one can expect
innovative and unique products in the near future.
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