Composite licence

What is a composite licence?

A composite licence is a single registration that allows one insurer to write both life insurance and non-life insurance, such as general and health cover, from the same balance sheet. Several countries allow composite insurers, usually with ring-fenced funds for the life business. India does not. As of October 2026, an Indian insurance company must still carry on only one class of business: life, general, health or reinsurance.

The idea comes up whenever insurance law reform is discussed, because a composite licence would let a single company offer a customer term cover, health cover and motor cover under one roof.

Why India has no composite licence

The bar sits in the definition of an "Indian insurance company" in section 2(7A) of the Insurance Act, 1938. The company's "sole purpose" must be to carry on life insurance business, general insurance business, reinsurance business or health insurance business. Capital rules in section 6 are also set per class: ₹100 crore of paid-up equity for a life or general insurer or a standalone health insurer, and ₹200 crore for a reinsurer.

This is why insurance groups in India run parallel companies. A financial group that wants to be in both life and general insurance needs two licensed insurers, two boards, two sets of capital and two distribution set-ups, even when they share a brand and a bank partner.

Composite licence and the 2025 amendment

A composite licence was widely expected to be part of the government's insurance law reform. When the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 was passed in December 2025, it did not include one. The "sole purpose" wording in section 2(7A) was kept as it was.

The Act did add a definition of "class of insurance business" covering life, general, health and reinsurance, plus any other class the Central Government notifies in consultation with IRDAI. Some legal commentators see this as a hook that could support new structures later, but on its own it does not allow one company to hold more than one class.

Life insurers can already sell some health products, such as fixed-benefit health and critical illness plans, and the definition of health insurance business includes personal accident and travel cover. These overlaps exist within the current rules and are not a composite licence.

What a composite licence would change for distribution

These points describe what would change if India allowed composite insurers; they are not current rules.

• One partner, one agreement. A bank or broker today signs separate agreements with a group's life and general companies. A composite insurer could offer one contract, one integration and one relationship team.
• Cross-selling inside one company. An agent appointed by a composite insurer could sell term, health and motor under one appointment. Today an agent who sells across lines needs a separate appointment, code and onboarding with each insurer, within the tie-up limits IRDAI sets for each line.
• Bundled products. Combined products, such as a single policy covering life, health and home, would become simpler to design and service. At present such bundles need two insurers working as a combi product.
• Cost and capital. Shared systems, claims and distribution could cut cost per policy, but regulators usually require separate funds and solvency for the life book, so the capital saving is smaller than it looks.
• Competition. A composite regime could favour large groups that already have both licences and could merge them, over standalone health insurers and single-line players.

How distributors work with the current rule

Until the law changes, distribution leaders plan around two or three separate insurer partners for the same customer. Common practices include joint training for life and general teams of the same group, shared lead systems where data-sharing consent allows it, and combined campaigns that sell a term plan and a health plan in one conversation but issue two policies.