The foreign partners, who have received IRDA approval, will not have to approach the Foreign Investment Promotion Board (FIPB) for subscribing to their share of equity in the joint venture company. This step has assumed importance because three out of four joint venture companies, which are likely to be granted registration shortly have foreign partners.

The three joint venture companies, which have submitted R-2 applications to the IRDA are ICICI-Prudential Life Insurance, HDFC-Standard Life Insurance and Sundaram Finance-Sun Royal Alliance. The fourth company Reliance Fire and General Insurance Company does not have a foreign partner.

The foreign equity in the insurance sector will be subject to a cap of 26 per cent, as stipulated in the IRDA Act.

According to an official release, the decision to permit FDI in insurance under the automatic route is in line with the government's policy of removing unnecessary pre-entry checks on FDI.

So far, IRDA has received 13 applications - eight for life and five for non-life insurance - from companies seeking to enter the insurance sector. The IRDA started accepting applications from August 16 last.

Although Dabur Allstate alliance was the first joint venture company to file its application for a licence in the life insurance sector, the alliance broke down. Dabur is currently looking for another foreign partner.

The companies who have recently applied for licences with the IRDA include Bajaj Auto Limited (non-life) and Birla-Sun Life.

The other joint venture companies which are awaiting a response from the IRDA are Iffco-Tokyo Fire and Marine Insurance, Reliance Life Insurance, Max India-New York Life Insurance, Kotak Mahindra-Old Mutual Life insurance, Tata-AIG (life) and Tata-AIG (non-life).