Gs3- Insurance sector - Reforms- Insurance act 1938 amendment and FDI hike- Much needed as insurance is capital intensive and risky.

✅Gs3- Insurance sector - Reforms- Insurance act 1938 amendment and FDI hike- Much needed as insurance is capital intensive and risky. 

✅Highlights of insurance sector : A timeline

🔴Nationalisation of life (LIC Act 1956) and non-life sectors (GIC Act 1972).

🔴1999- Insurance Regulatory and Development Authority of India (IRDAI) was setup

🔴Opening up of the sector to both private and foreign players in 2000.

🔴100% foreign direct investment (FDI) for insurance intermediaries (announced in the Union Budget of 2019-20)

🔴FDI from 26% to 49% to now-> 74%

Issues : 

🔴1. Insurance Gap and density : The insurance penetration (ratio of total premium to GDP)-. Both insurance penetration (3.76%) and insurance density ($78) is quite low for India while the global average is 7.26% and $818 respectively

🔴2. Lack of awareness on insurance needs

🔴3. Need for application of technology in insurance.