Financial Daily from THE HINDU group of publications
Thursday, Nov 24, 2005
Financial Daily from THE HINDU group of publications Thursday, Nov 24, 2005 |
|
|
|
|
|
|
|
Money & Banking
-
Foreign Direct Investment IRDA favours FDI at 49 pc Our Bureau
Mr C. S. Rao (right), Chairman, IRDA, and Mr Onkar S. Kanwar, President, FICCI, at the conference on Indian insurance industry in the Capital on Wednesday. - - Ramesh Sharma
New Delhi , Nov. 23 THE Chairman of the Insurance and Regulatory Development Authority (IRDA), Mr C.S. Rao, has said that the authority favoured hiking foreign direct investment limits in the insurance sector from 26 per cent to 49 per cent. He also said that the guidelines for unit-linked insurance policies (ULIPs) would soon be in place. ``We have always said FDI caps need to be raised to 49 per cent,'' Mr Rao told news reporters on the sidelines of FICCI's 10th conference on Insurance - Indian Insurance Industry: Towards Achieving Global Competitiveness. Mr Rao said the insurance companies need more capital to sustain their growth and increase in FDI limits would enable foreign players to bring in additional capital. He also said separate guidelines relating to ULIP policies will be in place in 2-3 weeks. He said the new guidelines would deal with issues such as the relationship between the premium and insurance cover and investment in ULIPs. Mr Rao said a minimum percentage of premium might be stipulated for insurance cover. Mr Rao also said that IRDA would submit a report to the Government for a comprehensive legislation and de-tariffing motor business from 2007. There is a need to move from a tariff -regulated regime to free market in general insurance products, he added. After the motor insurance business is free from a tariff regime, the tariff for owners' damage will come down while it will go up for third-party liability, he said. Mr Rao also proposed `Declined Motor Insurance Pool' which will cover the risks of old vehicles. ``In case 2-3 insurers have declined to underwrite the risks cover for an old vehicle, it would be taken up by the pool. If the amount of corpus in the pool is less than the claims, the difference would be met by the insurers,'' he said. Earlier, speaking at the inaugural session of the conference, he exhorted the industry to seriously address the irregularities in training, examination process, lack of experience in underwriting and sub-contracting of the sale of insurance policies by corporate agents to untrained sub-agents. Mr A.K. Shukla, Chairman, Life Insurance Corporation of India and Chairman, FICCI Insurance and Pensions Committee, pointed out that de-tariffication were issues concerning non-life industry. Mr Kamesh Goyal, CEO, Bajaj Allianz Insurance Company and Co-Chairman, FICCI Insurance and Pensions Committee said, the future of the insurance industry was challenging as profitability was expected to remain poor due to increase in re-insurance rates, competition-led downtrend in premium rates and jump in salaries by at least 15 per cent next year.
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page More Stories on : Foreign Direct Investment
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|