“We are hopeful that global reinsurance companies which will get final clearance from the regulator to open their branches in India and will be operational in the next six to nine months,” IRDAI whole-time member (finance and investments) V R Iyer said here on Friday on the sidelines of CII-organised event InsureInd.
“We have received seven applications from major foreign reinsurance companies including Llyods which have shown interest to open their branch offices in India. Applications from seven companies are in the different stages of consideration of the insurance regulator,” she said.
A foreign reinsurer has to clear three stages of licences from the insurance regulator to begin operations, Ms Iyer added.
Currently, state-owned GIC Re is the only reinsurer operational in the country and foreign reinsurers have liaison office in India.
Liberalising the sector to foreign re-insurers will break the monopoly of GIC Re. But government has now allowed minimum 10 per cent of the reinsurance business that an insurance company will buy has to go to the public sector.
The regulator believes that with the clearance to opening of branches of foreign reinsurance companies, domestic insurers will be able to undertake more risks and manage their capital more efficiently, she said.
“In India, catastrophic and disaster risks products are not available. With foreign reinsurance companies coming to the country, insurers can become creators,” Ms Iyer added.
Citing a consultant report, she said that by 2025, the life insurance business is expected to touch $185 billion and non-life insurance to touch around $75 billion.