Lic To Hawk Transnational Risk Cover

The Life Insurance Corporation of India (LIC) has tied up with a US-based Fortune 500 company, the a $ 117 billion Nationwide Inc, to commence operations in the US market. LIC will act as a corporate agent for the US-based insurer in the run up to setting up shop there.

Domestic Indians with relatives overseas will benefit from this venture as LIC intends to offer for the first time transnational insurance protection policies. This means that foreign Indian nationals in the US will bear the premium cost and their relatives will be the key beneficiaries.

LIC has got the final clearance from the government of India as well as approval from the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority (IRDA) to commence its US operations.

 

LIC managing director N C Sharma told Business Standard that the corporation received government of India approval for its US plans late last week, and has started to follow up on the various formalities with the US regulators. The idea of hawking the products of one of the largest US insurers which has operations across all the 52 US states is to get acquainted with the rules and regulations that vary from state to state, said Sharma.

As a corporate agent, LIC will induct a sales force to hawk the products. LIC has decided to play it safe and act as a corporate agent since the US is a developed and highly sophicated market.

Targeting the Indian population of around 1.7 million in the US market, Sharma said: "We will start with non-resident Indians and nationals of Indian origin". The state insurer is looking at a potential business of $ 800 million, whereby it will offer co-branded risk products to US citizens of Indian origin and NRIs, both for themselves and to help them send funds back to their relatives in India.

It will offer transnational insurance protection policies to foreign Indian nationals, who will have the option of buying cover for their relatives in India, either a pure term cover or an annuity plan to take care of post retirement times.

LIC will start hawking products in New York and California, before expanding to New Jersey and Texas and other states highly populated with Indians. After meeting state regulations and inducting the necessary share capital, LIC will within two years operate as an insurance company in collaboration with Nationwide.

Nationwide is a one of the largest insurance companies in the US, with operations in all the 52 states as well as Canada, Germany, among others.