Insurance reforms set India on path to universal coverage by 2047: R Doraiswamy

The government’s move to table the Insurance Act Amendment Bill — aptly titled Sabka Bima Sabki Raksha — has set the stage for a structural overhaul of India’s insurance landscape. The bill proposes amendments to the Insurance Act, LIC Act and the IRDAI Act, a development that industry watchers see as a major milestone, particularly for the Life Insurance Corporation of India (LIC).

Reacting to the bill’s introduction in Parliament, LIC, CEO & MD, R Doraiswamy described it as a landmark reform aligned with the broader vision of a “Viksit Bharat”. “It has been a great landmark bill that Government of India has introduced today for amending the insurance act LIC Act and IRDAI Act. It is a great step forward towards making India a Viksit Bharat towards which the insurance industry has taken the objective of insurance for all by 2047,” he said, adding that the legislation could significantly expand insurance penetration across the country.

One of the key takeaways from the bill is the absence of any provision on open architecture for individual agents — an issue that had sparked intense debate in recent months. According to Doraiswamy, this omission comes as a relief, especially for LIC, which has consistently raised concerns about the practicality of open architecture in a market crowded with products.

“It is a great step. You are aware that LIC has been expressing its views on open architecture and individual agents for quite some time,” he said, emphasising that the focus was always on customer interest rather than organisational convenience. With dozens of insurers and a vast array of products, Doraiswamy argued that expecting individual agents to master offerings across companies would be unrealistic and potentially detrimental to customers.

LIC’s agency-driven model remains central to its business. Nearly 92.5% of its individual new business policies come through agents, supported by a network of around 14.7 lakh agents nationwide. Doraiswamy also underlined the employment angle, noting that expanding agent recruitment could support job creation at a time when the economy needs it most.

The bill, however, has left some questions unanswered — particularly around composite licences. LIC has earlier indicated interest in entering the health insurance space, but the proposed legislation does not explicitly address composite licensing. Clarifying LIC’s position, Doraiswamy said the corporation’s approach has always been strategic rather than operational.“No, we have been looking at a foray into health insurance only as a strategic investor,” he said, explaining that LIC is exploring the possibility of taking a strategic stake in a standalone health insurer. Such a move, he noted, would not necessarily require a composite licence and could proceed with appropriate regulatory approvals. Importantly, he stressed that there has been no change in LIC’s plans following the tabling of the bill.Another significant aspect of the legislation is the enhanced role of the Insurance Regulatory and Development Authority of India (IRDAI), particularly with respect to commissions and remuneration. Doraiswamy downplayed any disruptive impact on LIC, pointing out that the insurer has historically followed conservative and compliant commission practices.

“As you are aware, LIC has always been a totally compliant organisation and we have been almost setting the benchmark for the industry in many areas,” he said. He added that empowering IRDAI to frame or tighten regulations on commissions would ultimately serve customer interests, a principle LIC strongly supports.

As parliamentary discussions on the bill unfold, insurers are watching closely for further clarity. For LIC, the reforms promise greater autonomy and regulatory certainty, while reinforcing its long-held belief in a customer-first, agent-led insurance model. If implemented effectively, the amendments could mark a decisive step towards the goal of universal insurance coverage in India by 2047.