• DECEMBER 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.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407