MICROCAPITAL BRIEF: India Close to Finalizing Rural Insurance, Microinsurance Regulations

The committee established in September 2012 by India’s Ministry of Finance to propose elements of a regulatory framework for India’s providers of microinsurance and rural insurance is reportedly close to releasing its final report. The regulations are intended to prescribe a framework through which insurance agencies can provide microinsurance products at prices that are affordable to poor people in both rural and urban areas.

Examples of the areas to be covered by the regulations include a framework for setting remuneration rates and specification of which regulatory body will have authority over the issues outlined in the regulations. The regulations will build from proposed microinsurance regulations released in 2012 by the Insurance Regulatory and Development Authority (IRDA) of India, the country’s insurance regulatory body, which would allow for district cooperative banks, regional rural banks, primary agricultural co-operative societies and individuals and to be eligible to operate as microinsurance agents. The proposed regulations will also cover services micro-, small- and medium- sized enterprises. The schedule date for the regulations to be finalized was not disclosed.

About the Indian Regulatory and Development Authority of India (IRDA)

The Insurance Regulatory and Development Authority (IRDA) is the regulator of the insurance industry in India. Formed by the Indian parliament in 1999, the mission of IRDA is “to protect the interests of the policyholders” and “to regulate, promote and ensure orderly growth of the insurance industry.” According to 2011 IRDA data, the Indian insurance industry consists of 24 life insurers, 27 non-life insurers and one re-insurer. Data on the number of microinsurers in the country is unavailable. IRDA is overseen by the Reserve Bank of India, the country’s central bank.

By Brian LeBlanc, Research Associate

Sources and Additional Information

Business Standard article, February 12, 2013, “Micro Insurance Norms to be Out Soon,” http://www.business-standard.com/article/economy-policy/micro-insurance-norms-to-be-out-soon-113021200773_1.html

MicroCaptal story, January 11, 2013, “MICROCAPITAL BRIEF: India’s Insurance Regulatory and Develoment Authority (IRDA) Relaxes Paperwork Requirements for Microinsurance Customers,“ https://www.microcapital.org/microcapital-brief-indias-insurance-regulatory-and-development-authority-irda-relaxes-paperwork-requirements-for-microinsurance-customers/

MicroCapital story, October 5, 2012, “MICROCAPITAL BRIEF: India’s Insurance Regulatory and Development Authority May Require Insurers to Sign Up All Poor Families Within 5 Years,” https://www.microcapital.org/microcapital-brief-indias-insurance-regulatory-and-development-authority-may-require-insurers-to-sign-up-all-poor-families-within-5-years/

MicroCapital story, August 6, 2012, “MICROCAPITAL BRIEF: Insurance Regulatory and Development Authority (IRDA) of India Proposes Shop Owners be Allowed to Sell Microinsurance,” https://www.microcapital.org/microcapital-brief-insurance-regulatory-and-development-authority-irda-of-india-proposes-shop-owners-be-allowed-to-sell-microinsurance/

MicroUniverse Profie: Indian Regulatory and Development Authority of India (IRDA) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=IRDA

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