IRDAI Directs Insurers to Meet Rural and Social Sector Obligations by 2047

The Insurance Regulatory and Development Authority of India (IRDAI) issued a master circular on Friday, directing life and non-life insurance players to allocate a certain percentage of their business towards meeting rural, social sector, and motor third-party obligations, with the aim of achieving universal insurance coverage by 2047.

According to the circular, all life insurers must ensure a minimum percentage of policies are allocated to identified and allocated gram panchayats. The Life Insurance Council, in collaboration with the Ministry of Panchayati Raj, will identify these gram panchayats.

Once gram panchayats are identified, the council will determine the minimum number of policies to be allocated to each insurer based on factors like market share. The council will then share the finalized list of gram panchayats with IRDAI.

Similarly, general insurers and health insurance providers will allocate policies in consultation with the General Insurance Council. Currently, India has 40 general insurance companies, including 5 standalone health insurance companies.

In 2022, IRDAI committed to achieving ‘Insurance for All’ by 2047, ensuring every citizen has appropriate life, health, and property insurance coverage, and enterprises have suitable insurance solutions.

To achieve this goal, IRDAI aims to create a regulatory framework that supports a competitive environment, providing wider accessibility and affordability to policyholders.

The master circular emphasizes the importance of extending insurance coverage to rural and social sectors, aiming to bridge the insurance gap and promote financial inclusion across India by 2047.