Insurance Sector Needs Over 50,000 Crore Capital: IRDA


HYDERABAD: Indian insurance industry needs huge capital infusion of over 50,000 crore ($8 billion) and foreign direct investment (FDI) can make things easy, its regulator said Friday.

Insurance Regulatory Development Authority (IRDA) chairman T.S. Vijayan said the regulator welcomes any type of capital infusion.

"If foreign capital is increased, it will be easier flow of capital than all put together by Indians. We are not saying FDI has to come. Capital is required and Indians may not have that much ability to put all the capital," he told reporters on the sidelines of an event.

He said since the bill for 49 percent FDI in insurance sector is in parliament, there will be some action only after it is passed.

The Insurance Laws (Amendments) Bill, 2008, which seeks to raise the FDI limit in the sector to 49 percent from the present 26 percent, was referred to a select committee of parliament last month.

Vijayan said they would submit various suggestions to the select committee to modernise the bill. Pointing out that the bill was envisaged in 2006, Vijayan said many changes had taken place since then, including the new developments in technology.

He said non-life and health insurances was not there in 2006 and this required separate provisions. Repositories and e-commerce are the other new developments which need to be incorporated in the bill.

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Source: IANS