Finance minister P Chidambaram has decided to track developments in the insurance sector - general and life - very closely. The minister has asked the Insurance Regulatory and Development Authority (IRDA) as well as companies, both in life and non life space, to submit a status report indicating the progress, hurdles and new measures undertaken by them by the first of every month.
"The move has been undertaken by the minister to ensure roadblocks are reduced while increasing penetration," said a senior government official.
The minister would personally examine the sector's status.
Sectoral growth has been slowing down as fresh policy sales plunged after the IRDA enforced a new set of norms in September 2010 for the controversial Unit Linked Insurance Plans (ULIPs). The norms benefit consumers, but reduce the profitability of companies and eat into agent commissions.
Chidambaram has already underlined the need to revive growth in the sector. The minister has also initiated talks with the opposition leaders to introduce the Insurance Bill in the current session of Parliament. The bill seeks to increase insurance sector FDI to 49% as the sector needs immediate capital of $5-6 billion to expand operations and increase penetration.
In the last few years, no global insurance company has entered the country, though Canada based Manulife, French firm Scor Global Life and South Korean Samsung Life Insurance, had shown interest.
The penetration level in the life and non-life segments is 4.4% and 0.76% respectivelty.