IRDA said new players have evinced interest in entering the insurance sector after the government increased the sectoral FDI cap to 49 per cent.
In December last year, the government through an ordinance hiked the foreign investment cap in the insurance sector to 49 per cent, which has been pending since 2008.
Earlier, this foreign investment limit was capped at 26 per cent. Insurance Regulatory and Development and Authority (IRDA) Chairman T S Vijayan said post the executive order, new players have shown interest in entering the fray.
Some new players interested in the sector have started preliminary discussions with the IRDA, he said. "I hope that once the preliminary discussions are over, a number of new players will apply for licences."
He said IRDA has started work on drafting a new set of regulations as per provisions of the ordinance.
"We have to cover 14 regulations. We will either make fresh regulations or amend the existing ones. Some of them are very critical and have to be done immediately." The regulator will also come out with a regulation on expense management, Vijayan said.
On his expectations from the Budget, Vijayan said he feels something on the lines of Pradhan Mantri Jan Dhan Yojana should be announced for the insurance sector as well. Banks have opened 12 crore new accounts under the financial inclusion scheme.
"One should expect focus on the property and catastrophe insurance," he said, adding insurance and pension funds should get more focus in the Budget for their ability to generate long-term savings.
About the proposed nuclear insurance pool, he said it is at discussion stage. "We should be able to provide insurance within India. If one company can't provide it then a number of companies can come together to provide capacity."
The pool will have a number of stakeholders to meet the need of huge financial cover in case of a nuclear mishap.
Earlier, addressing the conference, Vijayan spoke on profitability in the insurance sector. He said in a scenario where huge capital is involved, investors have legitimate expectation on return of capital they have deployed.
"Though there is a general impression that the profitability in the sector takes a long time - 10 to 15 years – it need not be the case at all. Pricing of products should be the focus area for actuaries and those who are doing valuations of the industry," he said.
