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The announcement comes close on heels of an unknown company Star Health and Allied Insurance clearing the first hurdle of getting a licence from IRDA.
"Star Health and Allied Insurance has received R1 clearance for setting up a stand-alone health insurance company with Oman Insurance Company," IRDA Chairman C S Rao said on the sidelines of a FICCI seminar on insurance.
Star Health, to be headed by former United India Insurance Chairman V Jagannathan, will start with Rs 105 crore (Rs 1.05 billion) capital, he said.
On the other hand, LIC wants to foray into health sector after government and IRDA comes up with a revised guideline on the lines of K P Narasimham Committee report, LIC chairman A K Shukla said.
The KPN panel has recommended lowering entry capital to from the present Rs 100 crore (Rs 1 billion) for the sector along with other changes.
Shukla said LIC will forge a joint venture with another company which has expertise and data on health insurance. LIC will seek the advice of reinsurers like Swiss Re or Munich Re for selecting the joint venture partner.
The Indian life insurance space is now dotted with 14 life insurance player and an equal number of general insurers. The list of life insurers just got extended after Shriram Life got its licence two days back.