IRDA to develop mechanism for faster approval of policies

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In a bid to promote insurance products and discourage investments in gold, insurance regulator IRDA will soon prepare a mechanism for faster approval of products as well as encourage firms to design products to improve penetration of insurance products.

“Roadmap has been agreed upon for faster approval of products. Some decisions will be announced on Thursday,” financial services secretary DK Mittal said on Wednesday after a meeting between finance minister P Chidambaram and Insurance Regulatory and Development Authority (IRDA) chairman J Hari Narayan.

The meeting, which was called by Chidambaram to examine measures for reviving the ‘sluggish’ insurance sector, focused on issues such as improving penetration of insurance products in rural areas as well as augmenting investment flow into the infrastructure sector, Mittal said. Another round of discussions are likely to be held on Thursday. The finance ministry is now examining the relaxing norms for insurance companies to attract more funds for the infrastructure sector as part of efforts to prop-up the sagging economy.

Insurers have pressed for faster clearances of products filed with IRDA. The issue of relaxation in investment norms to help the sector earn more premium was also discussed.

Cabinet to soon take up proposal to hike insurance FDI to 49%

The Union Cabinet may soon take up the long pending proposal to increase the foreign direct investment cap in the insurance sector to 49 per cent, from 26 per cent at present.

“The Bill is ready, it will be taken to the Cabinet for approval soon,” an official close to the development said.

Earlier this week, IRDA Chairman J Hari Narayan welcomed a hike in the cap, saying that the industry needs investments.

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