At least seven to eight companies are interested in setting up a reinsurance business in India, and the Insurance Regulatory and Development Authority of India (IRDA) is soon expected to come up with guidelines for the same.
“We will come out with guidelines for reinsurance companies by October. There are seven to eight companies that are interested,” said TS Vijayan, the chairman of IRDA.
Reinsurance companies provide insurance cover and other related services to insurance firms.
Vijayan had said recently that British reinsurer Lloyd’s had approached it informally to set up shop here. The regulator on Friday said that it will come up with guidelines soon.“Our first focus was to bring reinsurance regulations suitable for everybody. Lloyd’s is a different type of animal. We are trying to create regulations that suit that animal.”
The IRDA is also mulling guidelines related to management control in insurance firms, in the wake of the foreign direct investment limit being hiked to 49%.
“Act states that being a major shareholder, the management control should be with the Indian partner. We will come up with the final guidelines under corporate governance structure,” he said.
IRDA will also come out with guidelines on the amount that needs to be invested in unit-linked insurance policies. IRDA had recently said 25% of the ULIP investment has to be in government securities, a move opposed by many insurers, who say that policy shareholders should decide ULIP investment.
The regulator also aims to cap expenses of insurance companies.