India

This technical note provides an assessment of the recent development of regulation and supervision of the Indian insurance sector. It is part of the 2017 Financial Sector Assessment Program (FSAP) for India. The note focuses on several key developments in the regulation and supervision of the insurance sector since the last FSAP (2011), and evaluates the extent to which the recommendations of the 2011 India FSAP have been addressed. The note does not present a full assessment of observance of the International Association of Insurance Supervisors (IAIS) Insurance Core Principles (ICPs). The sector has continued to grow in scale and diversity, surmounting the adverse impact of the global financial crisis, although penetration remains relatively low. Public sector insurers continue to command a majority of the market and life insurance predominates, with about 75 percent of total premiums. Non-life insurance is dominated by motor insurance. Penetration rates are unchanged from 2011 and generally lower than in comparator countries, especially in non-life. While traditional sale channels continue to predominate, there is increasing diversity in distribution. Risks in life insurance are relatively well spread and in non-life are mainly short-term. The sector is profitable and solvency exceeds minimum requirements, but with exceptions.