Dec 2, 1999|
Insurance Bill likely to be passed by the Parliament
The chances of the Insurance Regulatory and Development Authority (IRDA) Bill being passed in the current session of the Parliament dramatically improved today with the Congress, the largest opposition party, proposing just four amendments to the bill. The bill has to be passed before the change of the century according to commitments given to the World Trade Organisation (WTO).
The four proposed amendments include:
- The private insurers must give priority to health insurance
- A manner in which the funds of the insurance companies are to be invested in the infrastructure sector must be specified
- Failure to comply with the rules should invite a fine of Rs 2.5 m. In case of persistent failures, the licence must be terminated
- The social sector obligations that the public sector insurers have to undertake must also be extended to the private sector insurers.
The amendments are minor in nature and will probably be accepted by the government to prevent further jeopardising the fate of the bill. The passage of the IRDA Bill will finally set into motion the process of the setting up of private insurance companies in India.
A well-developed insurance industry, apart from improving social standards, will go a long way in supporting the growth of infrastructure in the country. This is so because insurance companies have access to long term funds that are ideal for financing long gestation infrastructure projects.
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