“Finance sector reforms have to be an on-going process to keep pace with the continuing evolving conditions. Conscious of this fact the Government of India has constituted FSLRC with a view to rewriting and cleaning up the financial sector laws to bring them in tune with the current requirements,” the minster said while addressing a three-day meeting of the Asian Forum of Insurance Regulators here.
He justified the move for a unified regulatory governance of the financial sector given the complex function of consumer protection, micro-prudential regulation, resolution of failing financial firms, capital controls, systemic risk and monetary policy.
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FDI limit in insurance
Reiterating the ministry’s commitment for enhancing foreign direct investment (FDI) in the insurance sector to 49 per cent from the existing 26 per cent, the minister said the government was fully conscious of the fact that the insurance industry, being capital intensive, required additional injection of funds to fully realise its potential and to achieve a higher level of penetration.
He said insurance inclusion had to happen in the right spirit of financial inclusion by offering and enrolling the downtrodden and financially weaker sections at affordable cost.
Insurance and natural disasters
Meena said it was perhaps necessary to embed insurance products into the national disaster management policy to bring out the role of insurers and reinsures in meeting the objective of the national policy.
In this context, some of the issues that could be deliberated up on could be pricing of the cover, selection of the sum insured, serving of the claims and support of international reinsurance to ensure a large scale coverage.