MORE COVER IRDA bats for FDI in insurance

Mumbai:The insurance regulator has come out strongly in support of increased foreign direct investment (FDI) in the sector. TheInsurance Regulatory and Development Authority (IRDA) has also sought to increase insurance penetration in the country by providing individual companies district responsibilities, similar to the lead scheme in banking. 

    Increasing FDI in insurance from the present level of 26% to the proposed 49% will require an amendment to insurance laws. A bill to amend the act is pending with Parliament. "Good part of the reforms in the insurance sector is tied up with the insurance amendment bill with certain basic structural features of the insurance industry and can be considered when the bill is considered and passed by the parliament," said J Hari Narayan, chairman, IRDA, at an Assocham insurance summit in Mumbai. 
    Speaking in support of higher FDI, Hari Narayan said, "Insurance, like many other sectors in India, requires greater levels of investments and in that regard we would welcome steps to increase FDI in the insurance industry." 
    He added that the authority has provided all the inputs to the government in support of the amendments. 
    According to data from the Life Insurance Council, promoters of lifeinsurance companies have pumped in Rs 31,557 crore over the last decade. If the investment in non-life industry were to be added, the total capital deployed would be above Rs 40,000 crore. 
    Allowing foreign investors pick up an additional 23% is expected to result in multi-billion dollar capital inflows.