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Friday, Feb 15, 2002

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LIC plans foray into Sri Lanka

Dinesh Narayanan

MUMBAI, Feb. 14

THE Life Insurance Corporation of India (LIC) is scouting for a partner in Sri Lanka to enter the insurance market there. It plans to foray into the Emerald Island in about six months time.

The public sector insurance major is looking for a local company with a good network in Sri Lanka. Under Sri Lankan regulations, foreign companies necessarily need to team up with a local partner.

The Executive Director, Marketing and International Operations, LIC, Mr T.K. Banerjee, told Business Line that LIC was looking for a company that was not in the insurance business already.

"We are looking for a company that has a strong, established distribution network. LIC will bring in its domain expertise. The company would leverage the distribution network of the local partner to sell policies,'' Mr Banerjee said.

He, however, ruled out buying out an existing insurance player in Sri Lanka. "All the players there sell both life and non-life insurance. LIC is a life insurer and buying out an insurer in Sri Lanka would require us to partner a general insurance company, which we do not want to do,'' Mr Banerjee said.

Besides, the Insurance Regulatory and Development Authority of India (IRDA) restricts life insurers from undertaking non-life business and vice versa. LIC was a player in the Sri Lankan insurance market till about 50 years ago. The insurer stopped selling policies there after it was nationalised in 1956. However, it continued servicing the then existing clients. Sri Lanka itself nationalised the insurance business in 1961. Foreign companies were again allowed entry in the late eighties.

Besides Sri Lanka, the public sector giant is also eyeing other emerging markets in Africa and Europe.

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