For­eign cap­i­tal comes post eas­ing of in­surance FDI norms

The Financial Express - - MONEY & MARKET - Fe Bureau

Mum­bai, Aug 12: TS Vi­jayan, chair­man of the In­surance Reg­u­la­tory and De­vel­op­ment Au­thor­ity of In­dia (Irdai), on Fri­day said the in­surance sec­tor has re­ceived for­eign cap­i­tal in­flow of Rs 16,000 crore af­ter the for­eign direct in­vest­ment (FDI) limit was in­creased to 49% from 26%.

Speak­ing on the side­lines of the CII In­surance Sum­mit, Vi­jayan said the pur­pose to bring out a dis­cus­sion pa­per on list­ing of in­surance com­pa­nies was that it would bring in more trans­parency into the work­ing of the com­pany, not jutt for share­hold­ers but for out­siders as well.

“We are also think­ing that even com­pa­nies that are not listed should also bring dis­clo­sures re­quire­ment sim­i­lar of any listed com­pany. So we are await­ing the feed­back from the peo­ple and will later de­cide on that rules,” Vi­jayan sadi. Irdai in it board meet­ing in Oc­to­ber is likely to take up the con­sid­er­a­tion of sev­eral for­eign re-in­sur­ers who have ap­plied for branch pres­ence in In­dia.

Vi­jayan urged the in­surance in­dus­try to de­sign prod­ucts in such a way that they could make it eas­ier for cus­tomers to tide over sit­u­a­tions like fluc­tu­at­ing in­come lev­els and other risks dur­ing the long ten­ure of plans. This will stem the pre­ma­ture ter­mi­na­tion of poli­cies to a great ex­tent, Vi­jayan said.

On merg­ers and con­sol­i­da­tion in the in­dus­try, he said cus­tomer pro­tec­tion is the key and the reg­u­la­tor will en­sure that fair treat­ment is given to them. There were some re­port that reg­u­la­tor had raised some con­cerns about the pro­posed HDFCMax Life merger, but the chair­man clar­i­fied there was no con­cern and made it clear that cus­tomer pro­tec­tion is key.

“If two com­pa­nies are merg­ing to­gether, it is noth­ing new in the In­dian in­surance in­dus­try. When LIC was formed many num­ber of com­pa­nies were merged into it. It is a nat­u­ral process but we are very clear that cus­tomer pro­tec­tion is the key, what­ever prom­ises the com­pa­nies have made to the cus­tomer is go­ing to be the key. What re­serves they are main­tain­ing for the cus­tomers is the im­por­tant. We will be keen to en­sure fair treat­ment of cus­tomers,” Viyayan said.

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