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Non-banking finance company Magma Fincorp has received the initial ‘R1’ approval from the Insurance Regulatory and Development Authority (IRDA) to launch general insurance business.
‘R1’ is the first step of regulatory clearance required for carrying on the business as an insurance company in India.
“IRDA vide its letter dated April 13, 2011, granted the approval for the R1 application of the joint venture company,” Magma Fincorp said in a filing to the Bombay Stock Exchange today.
The company had applied for a licence in March 2010 to enter the general insurance business.
Kolkata-based Magma Fincorp has formed a joint venture with the German insurer HDI-Gerling International for the general insurance business to be conducted through Magma HDI General Insurance.
There are three stages of approval required for getting a licence for an insurance company. R1 is the preliminary approval given by IRDA wherein the regulator evaluates the promoters.
In the second stage (R2), IRDA looks into the business model of the company and in the third (R3), it looks at the formation of the company.
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