IRDA chief bats for intermediaries

MUMBAI: The insurance regulator has said that the foreign direct investment ceiling for insurance companies need not apply to insurance intermediaries. A more liberal foreign investment route for intermediaries could lead to new distribution channels opening up.
"The DIPP (department of industrial policy and promotion) guidelines are yet to come on where the foreign investment ceiling will be 49% and where it is going to be 100%.Today banks are corporate agents and many banks have more than 50-60% foreign capital. So we will have to wait for details to see which are the areas where the 49% ceiling will apply," said T S Vijayan, chairman of the Insurance Regulatory and Development Authority (IRDA).
In January, the IRDA had appointed a panel to look into the issue of foreign direct investment in insurance intermediaries and third-party administrators.
Unlike insurance companies, the issue of foreign investment in intermediaries is difficult to manage for the regulator. Unlike insurance companies or brokers who cannot exist without a licence, distribution entities and other companies that provide services to insurance firms can have a role outside insurance. To address these issues, the IRDA had constituted a 10-member committee headed by IRDA senior joint director Suresh Mathur. Other members include officials from IRDA, insurance council, insurance companies as well as brokers.