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.
In a recent case, the National Consumer Disputes Redressal Commission (NCDRC) provided some useful guidance in relation to a claim assessment by an Insurance Regulatory and Development Authority licensed surveyor. The NCDRC dismissed the insured's contentions, stating that, among other things, the insured had failed to provide the relevant documentation to the surveyor. Thus, the insured had been unable to take advantage of his own wrongdoing.
The account aggregator ecosystem was introduced to solve the problems of data portability in the insurance sector, among others. However, the question of whether the business model is viable will largely hinge on the successful implementation of the consent architecture envisaged under the Master Directions Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions and the terms of the contractual arrangements which are entered into with the various regulated entities.
The Insurance Regulatory and Development Authority recently issued the Exposure Draft on Insurance Regulatory and Development Authority of India (Conflict of Interest) Guidelines 2019, which seek to provide guidance on the conflicts of interest that arise between insurers and other insurance companies or intermediaries which have the same directors.