Banking Secy tells insurance cos to pass on full GST benefits to policyholders

The Department of Financial Services (DFS), under the Finance Ministry, today directed insurance companies to ensure that the full benefit of the Goods and Services Tax (GST) exemption on life and health insurance is passed on to customers, both existing and new.

At a meeting, which was held in the capital on Monday, Banking Secretary M. Nagaraju told public and private sector insurers that the recent exemption, cleared by the GST Council at its 56th meeting on September 3, must directly translate into lower costs for policyholders.

“During the meeting, the Secretary emphasized the importance of ensuring that the benefits of the tax reduction are fully passed on to both existing and prospective policyholders,” a statement from PIB said.

“The Secretary further directed insurance companies to proactively undertake outreach campaigns to publicize the reforms and highlight their prospective positive impact in making insurance more affordable and accessible for the common man,” the statement added further.

The GST waiver is expected to make insurance policies significantly more affordable, helping expand coverage and improve financial security for households. Policymakers believe it will also deepen insurance penetration across the country, a key policy goal.

The meeting was attended by senior officials from DFS and the Insurance Regulatory and Development Authority of India (IRDAI), along with top executives from both public sector insurers, such as the Life Insurance Corporation of India (LIC), New India Assurance and private players including Bajaj Allianz Life, ICICI Lombard, and Aditya Birla Sun Life.