The Indian motor insurance framework underwent a variety of key developments in 2019, including the introduction of standalone own damage cover, the extension of the present insurance framework on ads to point-of-sales persons and registered automobile dealerships and the notification of an amendment to the Motor Vehicles Act 1988.
Health insurance products have seen an improved uptake recently and there appears to be a significant focus on rewarding policyholders for preventive and wellness habits, with a specific focus on forthright disclosures made in policy documents and advertising material. With changes introduced under amendment regulations and the expected issuance of draft mediclaim guidelines, it appears that a more comprehensive wellness regime will shortly be introduced to the Indian insurance market.
The Insurance Regulatory Development Authority of India (IRDAI) recently notified the Indian Insurance Companies (Foreign Investment) Amendment Rules 2019 and the IRDAI (Insurance Intermediaries) (Amendment) Regulations 2019, which have introduced additional conditions with which insurance intermediaries that have a majority shareholding of foreign investors must comply. The regulations have brought much-needed clarity, but the insurance industry's reaction remains to be seen.
Since 2015, foreign investment in insurers and insurance intermediaries has been capped at 49%. However, many felt that this parity in the foreign direct investment (FDI) limits was unfair, as – unlike insurers – insurance intermediaries are not custodians of policyholders' money. Thus, the recently notified Indian Insurance Companies (Foreign Investment) Amendment Rules 2019 have effectively increased the limit on FDI in insurance intermediaries to 100%.
The Insurance Regulatory and Development Authority (IRDAI) recently issued the IRDAI (Regulatory Sandbox) Regulations 2019, which aim to facilitate the creation of a regulatory sandbox in which to test new business models, processes, proposals and applications in order to strike a balance between the orderly development of the insurance sector and the protection of policyholders' interests. Although insurance players are calling the sandbox a game changer, it remains to be seen how much it will be used.