Insurance JVs continue to be quite sound: Bansal
The government today said that the insurance joint ventures have not been affected by global financial developments and there are no regulatory concerns on their ability to meet policy holders claims.
"The Indian joint venture insurance units continue to be quite sound and have not been affected by the developments both in and outside India," Minister of State for Finance Pawan Kumar Bansal told Lok Sabha in a written reply.
All the companies have robust solvency margins and there are no regulatory concerns on the ability to meet policy holders claims as on date.
Following the meltdown, American International Group (AIG) which is a joint venture with Tata Group are into life and non-life business sought financial assistance from the the US government raising doubts about its Indian operations.
The Insurance Regulatory Development Authority is closely monitoring the position, he said.
On subprime exposure of the banks, Bansal said, it has been observed that none of the Indian banks and foreign banks' (operation in India), had any direct exposure to the subprime mortgage markets in the US and other markets and no direct impact is could be seen.
Some of the Indian banks with overseas operations, though not having any direct exposure to the US subprime markets, invested in certain Collateralised Debt Obligations or bonds which had a few underlying entities having sub-prime exposure.
Reserve Bank of India has placed a separate mechanism for reporting, on a monthly basis, the exposure of banks via their overseas operations and subsidiaries towards credit derivatives and other investments and the related Mark-to-Market losses, he said.