The Insurance Laws Amendment Bill was passed in the Lok Sabha on Tuesday. Since the market opened on Wednesday, shares of several leading insurance companies in the country have started rising. Shares of multiple companies related to insurance have been trading at high volumes.
The country's largest insurance company is Life Insurance Corporation of India (LICI). On the Bombay Stock Exchange Wednesday, this state-owned company's share price rose 0.65 percent to ₹860. Share prices of two ICICI Group companies also increased by more than 1 percent. ICICI Lombard General Insurance's share price rose 1.47 percent to ₹1,978. ICICI Prudential Life Insurance's share price increased 1.02 percent to ₹643.
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Additionally, share prices of several companies related to health insurance also rose during Wednesday's trading session. Significant increases were seen in share prices of Niva Bupa Health Insurance, SBI Life Insurance, Max Financial Services and Star Health Insurance. However, shares of Go Digit, HDFC Life and Canara HSBC Life Insurance declined on Wednesday.
The Insurance Laws (Amendment) Bill was recently approved in the Lok Sabha. Through this bill, the aim is to simplify regulations in the insurance sector, increase investment attractiveness and provide greater protection to customers. The government has stated that the amendment will expand the scope of work for insurance companies and strengthen the country's insurance market.
Impact of this bill:
Proposal to allow 100% foreign direct investment (FDI) in the insurance sector.
Initial capital requirements for re-insurers will be significantly reduced.
Opportunities will be created for mergers between insurance and non-insurance companies.
The approval limit for insurance companies to sell shares has been increased.
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The insurance regulatory authority (IRDAI) has been given power to control distribution commission payments.
There is a proposal to give LIC greater operational independence.
Arrangements have been made to establish a separate reserve fund for LIC.
(Ei Samay Online does not provide investment advice anywhere. Investment and trading in the share market or any field involves risk. Proper study and expert advice is recommended beforehand. This news is published for educational and awareness purposes.)
