Page 8 - Insurance Times April 2017 Special Issue on Newindia

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IRDAI

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Fairfax gets R1 nod from IRDAI Listing of insurance com-

IRDAI has given its initial approval (R1) - with India's largest private sector panies not mandatory:
to another venture Fairfax Financial bank, ICICI Bank. Lombard holds 36 per
Holdings owned by cent in ICICI Lombard IRDAI
Canada-based Indian bil- General Insurance, the The Insurance Regulatory and Devel-
lionaire Prem Watsa. largest private sector opment Au-
IRDAI had given a provi- general insurer. thority of In-
sional approval to the However, Watsa's Fairfax dia (IRDAI)
new Indian joint venture had decided to reduce its has not
established by Fairfax stakes in the existing planned till
Holdings in India along with Oben Gen- venture ICICI Lombard General Insur- now to make compulsory listing of in-
eral Insurance. Fairfax has a 49 surance companies on the stock ex-
ance with little clarity on the reasons.
per cent stake in the new Indian ven- It has recently decided to form a new changes for the time being as the
ture. banking institutions.
general insurance venture with Oben
Lombard, a subsidiary of Fairfax, has an General Insurance, a new company "We had come out with the expo-
existing 17-year-old non-life joint ven- promoted by team of insurance profes- sure draft on listing of insurance com-
ture - ICICI Lombard General Insurance sionals led by Kamesh Goyal. panies, but it's still a draft. People
are not happy with mandatory list-
IRDAI to segment balance sheets ing. So, for time being, it will not be
The insurance regulator is mulling to instruct companies for segregating bal- compulsory for insurers to list,"
ance sheets, in order to see loss and profit, expenses etc. for each category. IRDAI Chairman T S Vijayan said.
IRDAI is concerned about the profit and loss in divisions like group health, where According to Vijayan, the insurance
insurance companies are facing losses.
regulator is also in process of com-
Speaking to reporters on the sidelines of a seminar organised by the Insurance ing out with outsourcing and process
Brokers Association of India, T S Vijayan, chairman, Insurance Regulatory and regulations very soon.
Development Authority of India, said, "Many insurance companies chase top
Speaking on the sidelines of the Insur-
line and group insurance products in one segment that immediately adds to ance Brokers Association of India's
the revenue. But in such cases, the companies don't show profit and this is a
cause of concern. Once companies start segmental reporting of balance sheets, (IBAI) annual summit, Vijayan said,
while the gross domestic product
it will be evident which particular segment has losses.''
(GDP) growth is 7 per cent in India, the
IRDAI ensures firm grip over car insurance growth of the insurance industry is at
17 per cent. GDP growth, demo-
IRDAI has decided to ensure firm grip over the motor insurance and has in-
structed general insurance companies to make certain car buyers get the cover graphic environment and insurance
products developments are main fac-
they need. The importance shown by the Insurance Regulatory and Develop- tors for the growth of the insurance
ment Authority of India is in response to the finance ministry's concern that the
industry. Foreign insurance companies
largest general insurance business in the country has got into mis-selling. The are opening their branches in India as
general insurance business in India is estimated at Rs. 78,000-crore ($11.44
billion) premium a year, according to IBEF data. they see more potential in India.

8 The Insurance Times, April 2017

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