The Chairman of Insurance Regulatory and Development Authority, Mr J. Hari Narayan, on Friday said the initial public offering (IPO) guidelines for life insurance companies have been approved by the Securities and Exchange Board of India (SEBI) and a circular will be issued shortly.
“However, with regards to non-life companies, the preliminary work has been completed by the insurance regulator and it is now for SEBI to approve it before we finalise the norms,” he said.
Speaking at the graduation ceremony of Executive Programme in Insurance and Risk Management (EPIRM), Mr Hari Narayan said, “if there is an enhancement of FDI, there perhaps will be greater activity in the IPO space. Some companies will start completing 10 years in mid 2011. We won’t wait for FDI limits to be raised. We will wait for them to complete 10 years and after that it is up to them.”
With regard to guidelines for portability, he said they would be issued shortly.
This will enable individuals to shift their policies.
Earlier, he said that as a regulator, a major challenge and concern was how to cover 600 million people yet to be tapped, with differentiated products that suit their specific requirements.
“Apart from making it mandatory to serve rural areas by regulation of law, we are trying to work out with the insurance industry to figure out more efficient ways of distribution and increased penetration. We have to realise that insurance is relevant for certain families with income at certain threshold level,” he said.
The Central and State Governments are also contributing to this growth. They have created insurance schemes largely in the health sector. However, the cover is actually provided by the insurance company.