Composite insurance licence
Also called: Composite insurer · Topic: Financial Markets, Instruments, Insurance and Pensions · NCERT: Beyond NCERT
Meaning
A composite insurance licence allows one company to sell both life insurance (cover against death, or payouts on survival) and non-life insurance (health, motor, fire, crop and so on). In India, life and general insurers have traditionally run as separate companies. Supporters say one licence would cut costs, allow bundled products and help spread insurance further. Whether the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act 2025 allows composite licences needs to be checked against the final law.
Example
Today, a family buys a term life policy from a life insurer such as LIC and a motor policy from a separate general insurer. A composite insurer could sell both, together with health cover, from one company under one licence.
Don't confuse with
- Bancassurance: a bank sells an insurance company's products to its customers for a commission. The bank is only a seller. A composite insurer carries both life and non-life risks itself.
Related concepts
- Insurance penetration
- Bancassurance
- Reinsurance
- Microinsurance
- Parametric insurance
- Catastrophe bonds
- Surety bond
- Defined benefit pension
- Defined contribution pension
- National Pension System