The Life Insurance Corporation Act of 1956 and the General Insurance Act of 1938 are to be amended to pave the way for reforms in the insurance sector.
Addressing the CII conference on insurance here yesterday, B K Chatuvedi, special secretary (insurance), ministry of finance, said here today these amendments would be introduced over the next few months.
In addition, the Insurance Regulatory Authority Bill would also be introduced, he said.
All entrants into the sector would have to be registered with the IRA, he said.
The initial proposal was to introduce the Bill last month, but the government was unable to do so.
The Bill is now expected to be introduced by the next session of Parliament. He said the government would provide full backing for the IRA.
"This is a powerful mechanism for reforms in the insurance sector."
The government does not envisage any restriction either in the number of entrants or on a regional basis, he added.
However, all entrants into the business would have to conform to statutory norms that would cover solvency and capital adequacy ratios and organisational structures, he pointed out.
While the insurance industry had performed well, there was need to introduce competition and also improve penetration, he added.
