The Insurance Regulatory and Development Authority of India (IRDA) is all set to give final clearance to as many as six global players in the reinsurance market, enabling them to start operations by January 2017.
“About five-six companies have come and I think by January 2017, there should be some players in this market. We will be taking a decision in the next board meeting in October. Then they will have to bring capital and start working,” IRDA chairman TS Vijayan said.
Public sector GIC Re is the only reinsurer operational in the country now. The global reinsurers which have applied for the licence include Munich Re, Swiss Re, Scor, Hannover Re, XL Catlin and RGA. A foreign reinsurer should get three levels of licences from the IRDA to start operations and some of them have already got R1 licence and now are awaiting R2 and R3.
On listing of insurers which have completed 10 years of operations, Vijayan said law demands that the companies become public, but added that it will take some more time for the regulator to finalise the draft guidelines. “We wanted to have a discussion paper on this, so we brought out the paper and the companies have said they want to see how this goes forward. We have not come to a stage of finalising the draft,” he added.
“The government has already said general insurers will also go for listing, but I have not seen any paper on this. But I believe there is discussion going on,” he said while inaugurating an Assocham Global Insurance Summit. Considering that about five months are still left in this financial year, listing of more PSU insurance companies was possible. “It is possible but I am not too sure, we have not got any official paper, it is in the discussion stage but nobody has approached us,” Vijayan said.
He also said that IRDA would finalise the regulations pertaining to payment of commission or remuneration to insurance agents and intermediaries in October. “I believe in the next board meeting in October, we will be able to finalise.”
On insurance marketing firms, he said, “we have allowed to them sell up to three companies’ products… these are evolving processes.” Though the insurance industry in India has grown in terms of premium collections from Rs 45,000 crore in 2000 to Rs 4,63,000 crore in 2015-16, insurance penetration against world average and other Asian countries highlight that much more ground needs to be covered, he said.