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BJP MP Urges PM Modi to Create Insurer Bankruptcy Safeguards
A lawmaker wants people who buy insurance to be better protected if an insurance company fails.
Ajeet Madhavrao Gopchade wrote to Prime Minister Narendra Modi about the idea.
He said life-insurance policies often represent families’ savings, protection and retirement plans.
His proposal would create a special legal protection system or fund.
It could help move customers’ policies to another healthy insurer.
If that cannot happen, the policies could be managed gradually through an orderly run-off process.
The fund might be supported by payments from insurance companies.
He also wants India to study similar systems used in other countries and review its insurance-failure laws.
BJP Rajya Sabha MP Ajeet Madhavrao Gopchade asked Prime Minister Narendra Modi to establish statutory protection for policyholders if insurers become distressed, insolvent or bankrupt.
He proposed separate protection arrangements for life and long-term insurance, and for general insurance.
The proposal includes transferring viable life-insurance portfolios to another insurer or using an orderly run-off arrangement when transfer is not possible.
Gopchade suggested a policyholders’ protection scheme or fund financed through an appropriate levy on the insurance industry.
He urged a review of the Insurance Act, 1938, and related insolvency provisions, citing protection models in several international markets.
- Who
- BJP Rajya Sabha MP Ajeet Madhavrao Gopchade wrote to Prime Minister Narendra Modi.
- What
- He proposed a statutory policyholders’ protection mechanism and stronger insurer-insolvency rules.
- Where
- The proposal concerns India’s insurance system.
- When
- The letter was dated September 25, 2026.
- Why
- It aims to protect policyholders’ savings, coverage and benefits if an insurer becomes financially distressed, insolvent or bankrupt.
Key facts
- Proponent
- Ajeet Madhavrao Gopchade, BJP Rajya Sabha MP
- Recipient
- Prime Minister Narendra Modi
- Letter date
- September 25, 2026
- Proposed mechanism
- A statutory policyholders’ protection scheme or fund
- Coverage
- Separate arrangements for life and long-term insurance, and general insurance
- Possible financing
- An appropriate levy on the insurance industry
- Resolution options
- Transfer viable portfolios to another insurer or use an orderly run-off arrangement
- Legal review
- The Insurance Act, 1938, and related insolvency provisions
Quotes
Ajeet Madhavrao Gopchade
BJP Rajya Sabha MP who proposed a statutory policyholders’ protection framework.
“The comparative material identifies the United States, United Kingdom, Singapore, Australia and Canada among jurisdictions with such arrangements. Common features include insurer-funded mechanisms, defined coverage, differentiated treatment of long-term and general insurance, and the arrangements for the continuation or the transfer of long-term policies”
livemint.com
“For millions of families, a life insurance policy is not merely a financial product but represents long-term savings, family protection and retirement security; consequently, ensuring continuity of cover and safeguarding legitimate policyholder benefits in the event of insurer failure deserves careful consideration.”
livemint.com
Sources
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