IRDA seeks investment in insurance, hike in FDI cap
25 Sep 2012 12:14 AM GMT
The insurance industry needs big investments for growth in the coming years and will welcome hike in FDI cap, sectoral regulator Insurance Regulatory Development Authority [IRDA] said on Monday. The industry needs a lot investment for future growth, IRDA Chairman J Hari Narayan said to a query on the sidelines of an Assocham summit here.
'So, we will welcome the steps to increase the FDI in insurance sector,' he added. Foreign Direct Investment in the insurance sector is capped 26 per cent. With the government taking policy reform initiatives last week, especially allowing FDI in multi-brand retail and aviation sectors, there is expectation that the limit in the insurance industry may be raised. Hari Narayan also said IRDA is mulling to follow the lead insurance model based on geography, which is followed by the banking industry known as 'lead banking model', for growth in the sector. In the banking sector, the model is followed in specific areas to give emphasis on availability of various services in one particular zone, which the regulator is considering to replicate.
'IRDA has proposed the lead insurance model on the basis of geography,' Hari Narayan said, adding that the regulator is waiting for feedback from the life insurance and non-life insurance council.
'So, we will welcome the steps to increase the FDI in insurance sector,' he added. Foreign Direct Investment in the insurance sector is capped 26 per cent. With the government taking policy reform initiatives last week, especially allowing FDI in multi-brand retail and aviation sectors, there is expectation that the limit in the insurance industry may be raised. Hari Narayan also said IRDA is mulling to follow the lead insurance model based on geography, which is followed by the banking industry known as 'lead banking model', for growth in the sector. In the banking sector, the model is followed in specific areas to give emphasis on availability of various services in one particular zone, which the regulator is considering to replicate.
'IRDA has proposed the lead insurance model on the basis of geography,' Hari Narayan said, adding that the regulator is waiting for feedback from the life insurance and non-life insurance council.
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