Mumbai, Irdai chairman Ajay Seth on Tuesday announced that the sector watchdog has approved two proposals for owning 100 per cent stake in general insurance vehicles since the government opened up the space for 100 per cent foreign direct investment (FDI).
Speaking at an event organised by the Insurance Awareness Committee of the Life Insurance Council here, the career bureaucrat-turned-regulator said that the much-awaited BIMA Sugam platform will be launched by the end of September.
Without giving any details, Seth said one of the FDI proposals was given the nod on Monday.
Apart from these two licences on the general insurance front, where there is a perception of higher market opportunity, there is also interest on the life insurance front, he said, pointing to a recent proposal where a foreign entity has shown keenness to enter India with a substantial stake.
There is also interest among existing foreign promoters to increase stake in their joint ventures started with local partners, he said, adding that one proposal has been approved and there is another pending with the Insurance Regulatory and Development Authority of India (Irdai).
Last year the government had announced that foreign entities will be able to own 100 per cent in insurance companies under the automatic route, as against the 74 per cent cap earlier.
Conceding that the BIMA Sugam project, which entails to launch zero commission policies to cut costs of protection, is behind schedule, Seth explained that the project entails creating a market infrastructure institution where insurance companies have to connect their technology solutions and also making some investments.
Motor, health and term plans will be prioritised for sale on the Bima Sugam platform to start with, he added.
Meanwhile, replying to a question on suitability of products for savers and how to protect them from possible misselling, Seth said the Irdai is likely to come up with a distribution reforms consultation paper in July to address the same.
Irdai has also created a Rs 50 crore fund for awareness, which will be working alongside the industry's efforts to deepen the penetration, he added.
