Equity Limit Revision For Health Risk Firms In 03

While ruling out an immediate reduction in the equity limit for standalone health insurance companies to below the prescribed Rs 100 crore, the Insurance Regulatory and Development Authority (Irda) chairman, N Rangachary, today said that a review would be undertaken around March 2003.

"Some companies feel that the Rs 100 crore equity limit is too high. Perhaps they would be happy with Rs 40 crore or Rs 50 crore. But a change in the level would need a legal amendment for which we need convincing reasons for going to Parliament. So, we have said that we would look at the experience in the first 12-18 months before looking at the issue," Rangachary said on the sidelines of the sixth Insurance Summit organised by the Confederation of Indian Industry.

Earier at the seminar he said that the regulator was looking to create an interest in the sector by recognising third-party administrators.

"We are hopeful that when the system gains currency, there will be some improvement before refining the system and encouraging pure health insurance companies to come in," Rangachary said.

Irda has permitted both life and non-life insurers to issue policies to underwrite health insurance covers.