Final nod for global reinsurers' branches likely by January 2017: IRDAI chief

For the final R3 approval, reinsurers will be required to bring in capital to set up a branch after the second state of approval, which is likely in October, T S Vijayan said

The Insurance Regulatory and Development Authority of India (Irdai) is expected to give the final approval to foreign reinsurance companies to set up a branch in India.

Speaking on the sidelines of an insurance summit organised by Assocham, Irdai chairman T S Vijayan said that by January 2017, the body expects the final approval (R3) licence to be given out to the global reinsurers' India branches.

“We are speeding up the process and expect that some of the players will be able to begin branch operations in January 2017,” he said.

These players, including Swiss Re and Munich Re, have already received the initial approval or R1 licence. In the next Irdai authority meeting in October, Vijayan said that the second phase of R2 approval will be coming in for discussion. After this, these firms will be required to bring in the requisite capital to set up a branch.

The insurance sector will see the first initial public offering (IPO) of shares of the sector. Private player ICICI Prudential Life Insurance's IPO will open on Monday.

"The first IPO will be a pioneer in the sector. If the response is good, it will generate interest in the sector," Vijayan said.

On the discussion paper on listing of insurance companies based on the number of years in business, Vijayan said that some ompanies are not in favour of it, while some are neutral. "So, we are evaluating whether to bring it as a regulation or not. The aim is that this should increase governance and disclosures for companies," Vijayan said. Overall, growth in new business is slowly coming back said insurers.

Speaking during the event, S K Roy, chairman, Life Insurance Corporation of India (LIC), said that for August, the entity  has seen a 92 per cent growth in new business premium.

Going forward, the regulator said that thrust should be on technology-based services. He said that they will enable selling through electronic offices. Similarly, he said that agents should also move from selling to an assisted buying model.