MASTER MIND FINNASSET: Insurers in ops for 3 years can set up foreign branches

Tuesday, June 04, 2013

Insurers in ops for 3 years can set up foreign branches

Setting up foreign branches is set to become less strenuous for Indian insurers with the Insurance Regulatory and Development Authority (Irda) enabling companies in operation for a minimum three years to set up international branches. Insurance companies said this would offer them a platform to set up offices abroad.

Till now, Irda took decisions on setting up foreign branches on a case- to- case basis. In a set of guidelines, Irda said life insurance, non- life insurance and reinsurance companies should have a net worth of ₹ 500 crore, ₹ 250 crore and ₹ 750 crore, respectively, to be eligible to open branches abroad. The new guidelines have provided a platform to insurers to expand operations abroad, says Amitabh Chaudhry, managing director and chief executive officer (CEO) of HDFC Life. “While insurers would also need approvals in those jurisdictions where they desired to open offices, it is an enabling provision.”

Chaudhry, however, adds companies would not take any immediate decision to open foreign offices. HDFC Life, which has a liaison office in Dubai, is in the process of exploring other markets to expand, he says. Sector experts say developing nations in Asia and Latin America would be the areas insurance companies would look at for expansion. According to Roopam Asthana, CEO and whole time director of Liberty Videocon General Insurance, it is an interesting option for companies. “Countries like Sri Lanka, Bangladesh, Bhutan and Nepal have a synergy of operations in insurance, with that of India. This would present a good opportunity, when, coupled with local regulations, governing insurance in those nations.”

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