New Delhi: Government will finalise a comprehensive bill by November for insurance sector, which has grown by 25 per cent in the last two years with premium income surging to Rs 71,376 crore.

"Many of the provisions of Insurance Act of 1938 have become outdated and some have lost their relevance. There is urgent need to overhaul the Act in order to reflect new circumstances that exist today," Insurance Regulatory and Development Authority (IRDA) chairman, C S Rao said addressing in a FICCI (Federation of Indian Chambers of Commerce and Industry) conference in New Delhi on October 15.

The new legislation, consolidating the IRDA Act of 2000 and Insurance Act of 1938 is at present before the Law Commission.

The Commission's member secretary, T K Viswanathan said, "We are in the advanced stages of finalising the comprehensive Bill. It is expected within a month."

He said the new legislation would have a re-look into the investment norms for insurance companies.

Claiming that the insurance regulations in India were comparable with the best in the world, Rao said, "Insurers shall be less financially vulnerable to the vagaries of market because of the adoption of a prudential regulatory regime, which has set very high solvency requirements and capital adequacy norms."

India has been able to attract Rs 812.50 crore worth of Foreign Direct Investment (FDI) in insurance despite the 26 per cent cap.

Total premium income of 26 insurance companies, both PSU (Public Sector Undertaking) and private companies, increased by 25 per cent to Rs 71,376 crore till March end 2003.

PTI