Investment limits in Indian Insurance shall be raised to 49% now
News and Reviews : Finally the long awaited reform on Insurance Sector is coming its age. The financial liberalization which was initiated by Govt. of India in 90’s, led to opening up the Insurance Industry in 2001, is all set to see the Foreign Direct Investment (FDI) limits rising to 49% from the existing 26% limits. “This is a great news for the industry” says Mr Mahavir Chopra – CEO, Bonsai Insurance Broking. “Not only this will help existing Insurance Companies to give more room to their International Partners but will also infuse much needed Capital & Know How in the System. The raise will also bring International Brokers and Risk Managers to Indian shore as they always wanted bigger share for the India Play. It is an irony that Congress Govt. is opening up this sector at the fag-end of their current rule and also at a time when International Financial Markets, particularly Insurance Giants are facing huge problems of Liquidity and Investor Confidence in their countries i.e. Allianz (Germany) / AIG (USA)/ Hartford (USA) / MetLife? (USA) / Prudential (UK) etc. Nonetheless, we feel that it the right-move in the right direction which should have been charted long ago. Indian Insurance is close to USD 20.00 billion market with fairly healthy growth so far. The largest share comes from Life Insurance where LIC (Govt. Company) has a majority stake. “With 49% as new FDI limits, we will see consolidation and acquisition in the Indian Insurance Brokerage segment too”, says Mr Chopra. Click to read on …
‘The union cabinet today gave its approval for introduction of the Insurance (Amendment) Bill 2008 for amendment to Insurance Act, 1938, General Insurance Business (Nationalization) Act, 1972 and Insurance Regulatory and Development Authority Act (IRDA), 1999 in the Rajya Sabha in the basis of the recommendations made by a GoM (group of ministers),’ Chidambaram said. These bills will enable the raising of the FDI cap among private players from 26 percent to 49 percent, he added.
Through another bill, the equity of the state-owned Life Insurance Corporation LIC) will be raised from Rs.50 million to Rs.1 billion, Finance Minister P. Chidambaram told reporters after a cabinet meeting chaired by Prime Minister Manmohan Singh. This bill will raise the equity of the LIC from Rs.50 million to Rs.1 billion.
‘The amendments will remove archaic and redundant provisions in the legislations and incorporate certain provisions to provide IRDA with flexibility to discharge.
News and Reviews : Finally the long awaited reform on Insurance Sector is coming its age. The financial liberalization which was initiated by Govt. of India in 90’s, led to opening up the Insurance Industry in 2001, is all set to see the Foreign Direct Investment (FDI) limits rising to 49% from the existing 26% limits. “This is a great news for the industry” says Mr Mahavir Chopra – CEO, Bonsai Insurance Broking. “Not only this will help existing Insurance Companies to give more room to their International Partners but will also infuse much needed Capital & Know How in the System. The raise will also bring International Brokers and Risk Managers to Indian shore as they always wanted bigger share for the India Play. It is an irony that Congress Govt. is opening up this sector at the fag-end of their current rule and also at a time when International Financial Markets, particularly Insurance Giants are facing huge problems of Liquidity and Investor Confidence in their countries i.e. Allianz (Germany) / AIG (USA)/ Hartford (USA) / MetLife? (USA) / Prudential (UK) etc. Nonetheless, we feel that it the right-move in the right direction which should have been charted long ago. Indian Insurance is close to USD 20.00 billion market with fairly healthy growth so far. The largest share comes from Life Insurance where LIC (Govt. Company) has a majority stake. “With 49% as new FDI limits, we will see consolidation and acquisition in the Indian Insurance Brokerage segment too”, says Mr Chopra. Click to read on …
‘The union cabinet today gave its approval for introduction of the Insurance (Amendment) Bill 2008 for amendment to Insurance Act, 1938, General Insurance Business (Nationalization) Act, 1972 and Insurance Regulatory and Development Authority Act (IRDA), 1999 in the Rajya Sabha in the basis of the recommendations made by a GoM (group of ministers),’ Chidambaram said. These bills will enable the raising of the FDI cap among private players from 26 percent to 49 percent, he added.
Through another bill, the equity of the state-owned Life Insurance Corporation LIC) will be raised from Rs.50 million to Rs.1 billion, Finance Minister P. Chidambaram told reporters after a cabinet meeting chaired by Prime Minister Manmohan Singh. This bill will raise the equity of the LIC from Rs.50 million to Rs.1 billion.
‘The amendments will remove archaic and redundant provisions in the legislations and incorporate certain provisions to provide IRDA with flexibility to discharge.
