IRDA has also decided to grant 'in-principle clearance' for registration of three other companies - ICICI Prudential Life Insurance Co. Ltd., Max New York Life Insurance Co. Ltd. and IFFCO Tokio General Insurance Co. Ltd. - "subject to satisfaction of certain conditions." The companies have been asked to submit more information about their businesses.
The authority currently has another six applications pending before it for grant of registration. These include Reliance Life Insurance Co., Kotak Mahindra Old Mutual Life Insurance, Tata-AIG (Life), Tata-AIG (non-life), Birla Sunlife and Bajaj Auto Ltd. IRDA also accredited 14 institutes for training insurance agents and also launched a website for issuing and renewing licenses of insurance agents.
HDFC Standard Life will launch its products in December. With a wide product range, the company expects to tap both the urban and rural market. HDFC is to hold 81.4 percent and Standard Life 18.6 percent out of the paid up capital of Rs 168 crore.
Many more are keen to enter the insurance sector. India premier financial institution, The Industrial Development Bank of India (IDBI), will file application for life insurance by December this year with initial capital of Rs 100 crore and select a foreign partner later. Entry into insurance for IDBI is part of it overall plan of moving towards "universal banking" and a long-term strategic objective of maintaining its competitive position in the Indian financial sector. IDBI has a banking arm, IDBI Bank, a mutual fund, and IDBI Principal Asset Management Company in collaboration with Principal Financial of the U.S.
The government of India had earlier announced that foreign insurance companies will not have to go to Foreign Investment Promotion Board to get their proposals cleared. Clearance from The Insurance Regulatory and Development Authority is adequate. After the IRDA approval, the Reserve Bank of India is to be informed. It was the IRDA Act passed a year ago which made all the present developments possible. Critics of the IRDA Act feel the 26 percent cap on overseas equity must go. They feel investors must be free to bring in as much money as they want to invest. Joint ventures in India has turned sour because local partners had no money to invest at the time of need and the foreign partner is restricted from increasing its stake.
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