After addressing the grievances of the mutual funds industry,the finance ministry is looking to prop up the insurance sector with a likely announcement of measures to revive insurers and ease investment norms for them.
The move follows a meeting of finance minister P Chidambaram with heads of public sector insurance companies on Tuesday. Financial services secretary DK Mittal,who was also present at the meeting along with Irda chairman J Hari Narayan,said the issue of channelising their investment into productive sectors,particularly the infrastructure sector,was discussed.
For that what changes are to be made in the regulations by the government or by the income tax department… everything has been looked at, Mittal said,adding that another round of meeting would be held before a final decision is taken.
Todays meeting was basically for understanding… what we can do to prop up the economy, Mittal said.
Chidambaram had earlier held meetings with heads of state run banks as well as captains of industry to understand sectoral issues that need to be addressed for reviving growth. He is also slated to meet secretaries of infrastructure ministries later this week.
There is a need to revisit investment norms for insurance companies. We will look at revising investment regulations over the next month, Hari Narayan said.
Insurance companies also raised concerns over regulation in distribution of products that is creating a hurdle in reaching out to people. They raised issues of the long time taken for the product approval as well as issues relating to tax.
Irda is looking into proposals that would allow insurers to invest in A-rated bonds apart from the AAA- and AA-rated papers. It is also considering a plan to channelise more funds into core sector.