Standing Committee on Finance released report on “Performance Review and Regulation of Insurance Sector”

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Status of India’s Insurance Sector
- Insurance Penetration (percentage of insurance premium to GDP) at 4.2% in 2021-22 (Global average: 7%) compared to 2.71% in 2001-02.
- Insurance Density (ratio of premium to population) at $91 in 2021-22 (Global average: $874) compared to %11.5 in 2001-02.
- India ranked tenth in global insurance business with market share of 1.85% in 2021.

Recommendations by Committee
- Composite licensing: Allow composite licensing, enabling an insurance company to offer both life and non-life insurance products.
  - Benefits: Reduce costs and compliance hassles for insurers and offer customers more choice and value.
- GST: Rationalize GST rate on insurance products, especially health and term insurance, which is 18% at present.
  - Need: High premium burden acting as deterrent to getting insurance policies
- Open Architecture: Introduce ‘open architecture’ concept for insurance agents, which enables agents to associate with multiple insurance companies.
  - Benefits: Higher insurance penetration, financial inclusion and lower distribution costs.
- Unclaimed policies: A central portal like UDGAM (RBI portal for claiming unclaimed deposits) be created.
- Capital requirement: RBI, on behalf of Government of India, can issue ‘on-tap’ bonds of up to 50 years (current maximum tenure – 40 years) for investment by insurance companies.