Micro-insurance panel wants wider entry

Ahmedabad: In the wake of the ongoing pandemic, experts have underlined the urgent need to expand micro-insurance sector coverage, to better cater to low-income groups. To encourage more low-income individuals to become entrepreneurs by availing micro-insurance, the committee on standalone micro-insurance companies formed by Insurance Regulatory and Development Authority (IRDAI) has recommended reduction of entry-level capital requirement.

The committee recommended entry-level capital requirement be reduced from the existing Rs 100 crore to Rs 20 crore for allowing entry to entities focused on providing insurance coverage to low-income individuals and families. The committee has suggested a slew of other amendments in the regulatory framework to facilitate establishment of a standalone micro-insurance company including cooperatives and companies as composite micro-insurers.

IRDAI released the report of the committee last week. The 10-member committee was set up in February this year.

“In our recommendations, we have suggested the government and the IRDAI to license such businesses which can cater to the low-income segment. The foremost recommendation is to bring down entry-level capital requirement for standalone micro-insurance entities,” said Mirai Chatterjee, chairperson of the IRDAI-appointed committee.