Six insurance cos evince interest to raise FDI cap to 49%

A committee on health insurance is looking into the issue and expected to submit its report soon, says IRDAI Chairman

At least six insurance companies have evinced interest in raising the stake of their foreign partners from present 26% to 49%, Insurance Regulatory and Development Authority(IRDAI) Chairman T S Vijayan said today.

These six to seven companies are from both life and non-life insurance space, he told reporters in response to questions at an event organised by ICICI Lombard General Insurance Company Ltd to announce that it had issued one lakh policies of the long term two-wheeler insurance.

The insurance regulator declined to name the companies, saying they are yet to file a formal application on stake hike. "There are various stages of approval".

The government raised the cap on FDI in insurance sector in March this year.

Meanwhile, Vijayan hinted that IRDAI would soon take a call on the issue of long-term health insurance policies.

He said a committee on health insurance is looking into the issue and expected to submit its report soon.

"They have more or less finalised the report. We are evaluating the report actually," Vijayan said.

"We have to look at it...What is the capital, solvency, claim settlement procedure..Etc," he said noting that often health insurance claims are settled by third party administrators.

"There is a demand for long term (health insurance) policies, health savings policies in the market," he said.

Earlier, Vijayan stressed the need for increased insurance penetration in the country, noting that in general insurance space in countries like the US, 80% of assets are covered by some insurance company or the other, while it is hardly 7% in India.

ICICI Lombard General Insurance MD and CEO Bhargav Dasgupta said initial results regarding the long term two-wheeler insurance, launched in April this year, are encouraging, with the company reporting strong consumer interest, as reflected in the milestone achieved.