Insurance: Lloyds puts conditions for Indian entry

General Insurance Corp of India has been planning to become a member of Lloyds market.

Listen to this article

00:00

1x 1.5x 1.8x

The mega plan of state-owned reinsurer General Insurance Corporation of India GIC Re to become a member of Lloyds market,the Mecca of insurance companies,is not going to work out unless the country opens up the insurance sector further.

Putting conditions for the Indian reinsurers entry into the Lloyds market,a top official and board member of Lloyds UK said the Indian company can think of joining Lloyds only after India allows more foreign investment in the insurance sector.

When contacted,an official spokesperson of Lloyds said,We will not be able to offer additional support from within India unless there are changes to the law to allow foreign reinsurers to establish reinsurance branches on the ground. That is a public policy decision for the Indian government and Parliament to make.

On a specific question whether there is any condition from the Lloyds side which can be a barrier in GIC Res efforts to take over a Lloyds syndicate,the spokesperson said,Lloyds does not talk about individual applications or expressions of interest to join the Lloyds market.

Entry into the Lloyds market is subject to Lloyds approval and we have rigorous criteria against which all applications are considered. Each application will be considered on its individual merits, the spokersperson said.

Lloyds is keen to play its part in Indias success story and we already provide important reinsurance support to the local market,he said.

Earlier AK Roy,CMD,GIC Re had announced that the national reinsurer is planning to acquire a syndicate 8211; through which Lloyds market does business to strengthen its financial standing in the global reinsurance market.

Story continues below this ad

We havent decided as yet. We shall continue looking at the opportunities to do so, said Roy.

The insurance bill,pending in the Rajya Sabha since 2008,provides for increasing the foreign investment limit in the sector to 49 per cent from 26 per cent. The Standing Committee on Finance,headed by senior BJP leader Yashwant Sinha,did not favour raising the FDI ceiling. finance minister P Chidambaram recently said the bill will be taken up in the winter session of Parliament.

Unlike many other insurance brands,Lloyds is not a company; its a market where members join together as syndicates to insure risk. Much of Lloyds business works by subscription,where more than one syndicate takes a share of the same risk.