Bank KYC will be Eligible for Buying Insurance
KYC of banks will be eligible for insurance companies to issue policies. This will make the process for purchase of insurance policies simpler.
Premium Threshold increased to 15% for Disabled
The budget has relaxed the premium threshold (for availing tax deduction) to 15% in case of a person suffering from a disability or certain ailments. Currently, to get a tax deduction under section 80C on premiums, the sum assured or the death cover needs to be at least 10 times the annual premium. However, for a person suffering from a disability this limit has been increased from 10% to 15%.
New Homogenous Groups Recognised for Group Insurance
Group insurance products will now be offered to homogenous groups such as SHGs, domestic workers associations, anganwadi workers, teachers in schools, nurses in hospitals etc.
Govt. Health Scheme or Rashtriya Swastha Bima Yojana will be extended
The government health scheme or Rashtriya Swastha Bima Yojana will be extended to cover auto rickshaw pullers, taxi drivers, sanitation workers and rag pickers.
Govt will Set up New Branches of State-Owned Insurers in All Towns with Population of 10,000 or more
The government will set up at least one branch office of state-owned Life Insurance Corp. of India (LIC) and one state-owned non-life companies (United India Insurance Co. Ltd, National Insurance Co Ltd, The Oriental Insurance Co Ltd or The New India Assurance Co Ltd) in all towns of India with a population of 10,000 or more by the end of financial year 2014.
Insurer can Open New Branches in Tier-II and below Cities without the Prior Approval
Insurance companies would be allowed to open branches in Tier-II and below cities without the prior approval of the IRDA.
Insurer allowed to Trade in Debt Market
Insurance companies will be directly allowed to trade in debt market, subject to regulatory approval. The main objective of this is of developing the debt market, stock exchanges will be allowed to introduce a dedicated debt segment on the exchange. Banks and primary dealers will be the proprietary trading members. In order to create a complete market, insurance companies, provident funds and pension funds will be permitted to trade directly in the debt segment with the approval of the sectoral regulator.
Banks allowed to Act as Insurance Brokers
Banks will be allowed to act as insurance brokers. This means banks will be able to sell products of multiple insurers. At present, banks can sell products of only one life insurer and one general insurer. But as brokers, they will be allowed to sell products of multiple insurers (or can sell products of all 44 insurance companies). Banks will have to apply for a broking licence and will have to comply with broking regulations.