Raising insurance FDI cap to 49% vital
India's proposal to raise FDI cap in insurance sector to 49 per cent is vital for attracting more foreign investment in the segment, Association of British Insurers Director General Stephen Haddrill said Tuesday.
"We believe the government's proposal to raise the FDI cap to 49 per cent to be vital. This will enable India to attract foreign investment from a wider range of overseas companies, which are currently deterred by the 26 per cent limit," he told reporters here.
He said the proposal would also enable existing joint ventures to raise more capital and serve more customers with a wider range of products.
Haddrill also stressed on the long term committment of the British insurance industry to invest in India. The British insurers have already invested heavily with Indian joint venture partners.
Meanwhile, Shikha Sharma, Managing Director and CEO, ICICI Prudential Life Insurance, favoured a stable tax regime that recognises long term saving aspect and a framework that allows more product innovation for desired growth in the life insurance segment.
On possible adoption of Exempt-Exempt-Tax (EET) mechanism by the government, she said: "EET would be detrimental for the insurance sector as it would discourage savings in totality and not only long term saving."
Antony Jacob, Managing Director, Royal Sundaram Alliance Insurance Company, said at present 70 per cent of general insurance market was price controlled and companies do not have freedom to design their own product.