NEWS & ADVICE : AUTO INSURANCE
IRDA permits insurers to set up business in other countries
By Neelima Shankar
May 27, 2013
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Insurance regulator, IRDA has permitted insurance companies with sound financial health and minimum of three years of operations to set up business abroad.

Since long, Companies had been seeking permission from IRDA to open foreign insurance companies and branch offices abroad to exploit markets overseas.
IRDA has issued guidelines for Indian companies to set up life, general or reinsurance business abroad.

As per the guidelines, life and general insurance companies with a minimum net worth of Rs 500 crore and Rs 250 crore respectively and can apply and seek permission to set up business abroad.

In the case of reinsurance companies, the net worth should be Rs 750 crore.

"The registered Indian insurance company should have been in operations for at least 3 years," as mentioned in guidelines said.

The insurance company desiring for foreign operations will have to earn profit for three years, it said.

Seeking to safeguard the interest of domestic policyholders, IRDA further added that the insurer setting up overseas business will not be allowed to use the fund of domestic policyholder.

"The Indian insurance company shall have in place appropriate arrangements to ensure that the policyholder's liabilities that arise for foreign operations are adequately ring-fenced in order to protect the Indian policyholder," the guidelines said.


 


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