Foreign reinsurers to be allowed to open branches in India
04 Oct 2012
Foreign reinsurers will be permitted to open branches for reinsurance business in India and the provisions of section 27E, which prohibits an insurer to invest the funds of the policyholder directly or indirectly outside India would apply to such branches, an official release said today.
`Foreign company' has been defined as a company or body established under a law of any country outside India, and includes Lloyd's established under the Lloyd's Act, 1871 (United Kingdom) for the purpose of insurance and reinsurance.
Besides, the government has proposed to prune minimum capital requirements of a health insurance company to Rs50 crore from Rs100 crore for companies in the general insurance business, in order to reduce the entry barrier.
The definition of 'health insurance business' has been revised to clearly stipulate that health insurance policies would cover sickness benefits on account of domestic as well as international travel.
In the case of a joint venture with a person having principal place of business or domicile outside India, IRDA may, withhold its registration, provided such person has been debarred in that country to carry on insurance business.
To address concerns regarding the obligatory underwriting of third party risk on motor vehicles, the government has proposed a separate Motor Vehicle Insurance and Compensation Legislation.
The period during which a policy can be repudiated on any ground, including misstatement of facts etc, has been confined to three years from the commencement of the policy and thus no policy would be called in question on ground of misstatement after three years.
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