More foreign insurers are keen to take the new route adopted by billionaire Warren Buffet? s company Berkshire Hathaway to set up operations in form a corporate agency in India. Many foreign insurers who are waiting to find a partner in India to set up operations may make use of the model adopted by Berkshire to gain entry in to India, said industry sources.
The insurance regulator Irda recently for the first time allowed a joint venture (JV) between Berkshire Hathaway and insurance multinational Allianz to set up an on line corporate agency to sell the products of Bajaj Allianz group of companies. A corporate agency can only sell products of a single life and general insurance company.
The reason for the new trend is that only in a corporate agency, a foreign insurer can own 100% stake while in other entities like in a primary insurance company or in a reinsurance company or in an insurance broking, it can only have 26% stake.
A senior official at the insurance regulator Irda explained that the regulator allowed a 100% JV between Berkshire Hathaway Allianz to set up operations in India as there was nothing in law which prevented such an entity to operate in India. ?Foreign banks like Citi, HSBC have 100% corporate agencies in India.?said the Irda official.
