The Hindu Business Line : MNC insurers in talks for foray here

The insurance industry is likely to attract three or four new multi-national companies to start activities in India this fiscal, the Insurance Regulatory and Development Authority (IRDA) Chairman, Mr C.S. Rao, has said.

Talking to newspersons on the sidelines of a seminar at the Administrative Staff College of India (ASCI) here on Friday, he said, "three-four global majors are currently negotiating with their prospective Indian partners to begin operations mostly during 2006-07."

These companies include European insurance giant Axa, American major Principal and Japanese insurer Sompo. While Axa is currently in talks with the Bharti group, Principal is negotiating with the Punjab National Bank (PNB).

Earlier, delivering the K.L.N. Prasad Memorial Lecture on "Indian Insurance Industry - Post-liberalisation Landscape', the IRDA Chairman said India was being viewed by many multi-national insurance companies as a vast market waiting to be tapped. According to Mr Rao, the global players were interested in this market since there wasis vast untapped potential with a major portion of household savings parked in the banking sector. Stating that the Indian insurance market was on a threshold of a free market where the players themselves decide the prices, Mr Rao said the free tariff regime would come into effect from January 1 next year. Apart from providing sufficient time to the insurers towards de-tariffing regime, the regulator wasconducting review programmes at various stages for ensuring a smooth transition, he said.

Roadmap for de-tariffing

According to the IRDA Chairman, the General Insurance Council, which comprises all the general insurers, has considered the roadmap for de-tariffing. Stating that there was some apprehension about motor tariff, he said that all the insurers had stressed the need for de-tariffing motor premium along with the rest.

"We see no difficulty in agreeing to this suggestion. However, we would like to ensure that no vehicle, which has a valid registration and permission to ply on the road, goes without a proper insurance cover. We have, therefore, suggested creation of a Declined Motor Insurance Pool," Mr Rao said.

. "We are planning to bring the Pool into operation at least 2-3 months before the industry goes into de-tariffing," the IRDA Chairman said.

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