PSU insurance cos may not go public

MUMBAI: The government does not have any plan to allow public sector insurance companies to raise money through the stock market for meeting capital requirements and expansion plans, a senior official said on Wednesday. "We are not considering allowing public sector insurance companies to go public for capital raising. It is not required as they have sufficient reserves," G C Chaturvedi, Joint Secretary (Banking & Insurance) in Ministry of Finance, said. There was no requirement of additional capital, he said. State-run Life Insurance Corporation, the country's biggest insurer, earlier had plans to tap the stock markets for raising funds. On entry of foreign re-insurance companies in India, Chaturvedi said the government was considering allowing these companies to set up branch offices in India with certain regulatory restrictions. "The representative offices of re-insurance companies cannot write business here. The branch offices could be allowed with some regulatory restrictions," he said. The regulatory requirements would be finalised by the Insurance Regulatory and Development Authority, he said. Asked on the amendments to the Insurance Act, Chaturvedi said the Group of Ministers have had three meetings and would meet again shortly to iron out differences. The proposed amendments pertain to increasing the foreign direct investment cap in insurance sector and reduction in the minimum capital base for health insurance companies.

Source: PTI , MAY 23, 2007