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Indian insurance companies can now go global. They require a minimum of three years of operation, among other criteria, to be eligible to apply for opening offices overseas.
According to the guidelines issued by the Insurance Regulatory and Development Authority (IRDA), the life and general insurers should have a net worth of Rs 500 crore and Rs 250 crore respectively.
In the case of reinsurers, the minimum net worth required has been fixed at Rs 750 crore.
They should be in good financial health and should have posted profits for three years in the last five years from the date of application to the regulator, with prescribed solvency ratios.
The applicants “should not suffer from any adverse report of the Authority on its track record of regulatory compliances, for three years out of the last five years,’’ T.S. Vijayan, Chairman, IRDA, said in a circular.
“The Authority has been approached by Indian insurance companies seeking permission to open offices outside India. In order to exploit the foreign market, after due consideration, these guidelines are issued,’’ he said. An insurance company can take up life, non-life and reinsurance business abroad according to its licence.
Insurance companies could also subscribe to the paid-up capital of another insurance company registered outside India or a foreign subsidiary company wherein the Indian insurance company has a holding of more than 50 per cent.
In addition, an investment policy to suit the scale, nature and area of operations of the foreign branch offices, apart from business considerations should be formulated. In framing such a policy, the issues relating to compliance with host regulator’s requirements such as liquidity, prudential norms and exposure should be addressed.
According to the guidelines issued by the Insurance Regulatory and Development Authority (IRDA), the life and general insurers should have a net worth of Rs 500 crore and Rs 250 crore respectively.
In the case of reinsurers, the minimum net worth required has been fixed at Rs 750 crore.
They should be in good financial health and should have posted profits for three years in the last five years from the date of application to the regulator, with prescribed solvency ratios.
The applicants “should not suffer from any adverse report of the Authority on its track record of regulatory compliances, for three years out of the last five years,’’ T.S. Vijayan, Chairman, IRDA, said in a circular.
“The Authority has been approached by Indian insurance companies seeking permission to open offices outside India. In order to exploit the foreign market, after due consideration, these guidelines are issued,’’ he said. An insurance company can take up life, non-life and reinsurance business abroad according to its licence.
Insurance companies could also subscribe to the paid-up capital of another insurance company registered outside India or a foreign subsidiary company wherein the Indian insurance company has a holding of more than 50 per cent.
In addition, an investment policy to suit the scale, nature and area of operations of the foreign branch offices, apart from business considerations should be formulated. In framing such a policy, the issues relating to compliance with host regulator’s requirements such as liquidity, prudential norms and exposure should be addressed.
REPORTING
On a quarterly basis, the business mobilised through the foreign branches, expenses incurred, claims performance and other vital data has to be submitted to the IRDA, the circular added.
naga.gunturi@thehindu.co.in
Source: thehindubusinessline
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