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Lok Sabha has taken a big decision by approving 100% FDI in the insurance sector. The government claims that this will increase competition and insurance policies will be affordable for the common people. Now the question is what effect this change will have on the pockets and facilities of the customers.
New Delhi. Lok Sabha has approved the bill to increase the limit of Foreign Direct Investment (FDI) in the insurance sector to 100 percent. The objective of the government is to attract foreign capital into the country and increase competition in the insurance market. Finance Minister Nirmala Sitharaman said that with more competition, customers will get policies at better rates. In such a situation, the question arises that how will this decision directly impact the common man.
Policy expected to be cheaper and more options
With 100 percent FDI permission, foreign insurance companies will be able to operate with full stake in India. This will bring new players into the market and increase competition on existing companies. Customers can directly benefit from increased competition, as companies will offer policies with lower premiums and better features. With more options in health, life and general insurance, customers will be able to choose the best policy as per their needs.
Benefit of better service and new products
Insurance companies will have more capital due to increase in foreign investment. With this, they will be able to improve the digital platform, claim settlement system and customer service. The claim process is expected to be fast and transparent. Apart from this, new types of insurance plans with international experience can also enter the Indian market, such as customized health cover and long-term retirement products.
What is the impact on public sector insurance companies?
The Finance Minister made it clear that the priority of the government is also to strengthen the public sector insurance companies. Since 2014, several steps have been taken to improve their financial health. 100 percent FDI will increase competition between private and foreign companies, due to which government companies will also have to improve their services. This is likely to increase the quality of the entire sector, which will ultimately benefit the customers.
What can change for the common man
After the passing of this bill, it can become easy and economical for common people to get insurance. Better premium rates, faster claim settlement and more options – all these changes are in the interest of customers. However, the role of regulation and monitoring will remain important, so that the interests of consumers are protected. Overall, 100 percent FDI will bring new energy to the insurance sector and the common man can see its positive impact in the long run.
