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Indias Insurance Sector

Project Report Submitted on completion of the course on Financial Institutions & Markets

Group 3 2/18/2013

Submitted by: Keshav Pareek 11FN-055 Manasvi Sahai 11FN-058 Megha Bhalla 11FN-063 Amit Nayak 11FN-065


Overview of the Indian Insurance Industry .................................................................................... 3 History of the Insurance Industry in India ...................................................................................... 4 List of Life/Non-Life insurance companies.................................................................................. 4 Life insurance business ............................................................................................................... 6 Non-life business......................................................................................................................... 6 The Regulatory Regime ................................................................................................................... 7 Features of the 1999 IRDA Act .................................................................................................... 8
Licensing ................................................................................................................................................................8 Solvency controls ...................................................................................................................................................9 Business conduct ...................................................................................................................................................9

Trends, Challenges & Risks Ahead ................................................................................................ 11 FDI in Insurance............................................................................................................................. 16 REFERENCES .................................................................................................................................. 17

Overview of the Indian Insurance Industry

Both the life and general insurance sectors in India, which were nationalized in the 1950s and 1960s, respectively, were liberalized in 2000. Since then, the Indian insurance sector has seen rapid growth. The total premium of the insurance industry has grown at a CAGR of 28.1% during FY03-07. In terms of total premiums, the Indian insurance sector is ranked as the fifth-largest insurance market in Asia as of FY07. Post reforms, the number of players have increased from four in life insurance and eight in general insurance in 2000 to 21 and 20 (including one reinsurer), respectively, in 2008. With low insurance penetration levels, growth potential remains promising. More importantly, the pace and nature of growth will likely see a change where new behaviors and dynamics of demand and supply will apply. On the demand side, growth is being fuelled by the growing population base, rising purchasing power, increased insurance awareness, increased domestic savings and rising financial literacy. The suppliers are correspondingly playing a market making role as competition heightens and differentiation become necessary for profitable growth.

History of the Insurance Industry in India

In 1818, a British company called Oriental Life Insurance setup the first insurance firm in India followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance Society in 1829. Though all this companies were operating in India but insuring the life of European living in India only. Later some of the companies started providing insurance to Indians with approximately 20% higher premium than Europeans as Indians were treated as substandard. Bombay Mutual Life Assurance Society was the first company established in 1871 which started selling policies to Indians with fair value. In 1937, the Government of India setup a consultative committee and finally first comprehensive insurance act was passed in 1938.

List of Life/Non-Life insurance companies

Non-Life Insurers Public Sector
National Insurance Co Ltd , New India Assurance Co Ltd , Oriental Insurance Co Ltd , United India Insurance Co Ltd, Export Credit Guarantee Corporation of India, Agriculture insurance

co.of India Ltd.

Private Sector Bajaj Allianz General Insurance, Bharti AXA General Insurance, Cholamandalam MS, Future Generali India Insurance, HDFC ERGO General Insurance, ICICI Lombard, IFFCO Tokio, Liberty Videocon General Insurance Co Ltd, L & T General Insurance, Magma HDI, General Insurance Co Ltd, Raheja QBE General Insurance, Reliance General Insurance, Royal Sundaram, SBI General Insurance, Shriram General Insurance, Tata AIG General, Universal Sompo General Insurance, Star allied, Apollo Munich Health Insurance, Max Bupa Health Insurance, Religare Health Insurance Company Ltd, Star Health and Allied Insurance company Ltd

Life insurers Public Sector Life Insurance Corporation of India Private Sector
AEGON Religare Life Insurance, Aviva Life Insurance, Bajaj Allianz Life Insurance, Bharti AXA Life Insurance Co Ltd, Birla Sunlife, Canara HSBC Oriental Bank of Commerce Life Insurance, Star Union Daiichi Life Insurance, DLF Pramerica Life Insurance, Edelweiss Tokio Life Insurance Co. Ltd, Future Generali Life Insurance Co Ltd, HDFC Standard Life Insurance Company Limited, ICICI Prudential, IDBI Federal Life Insurance, IndiaFirst Life Insurance Company, ING Vysya Life Insurance, Kotak Life Insurance, Max Life Insurance, PNB MetLife India Life Insurance, Reliance Life Insurance Company Limited, Sahara Life Insurance, SBI Life Insurance Company Limited, Shriram Life Insurance, TATA AIA Life Insurance

GIC Re (General Insurance Corporation of India - Re-Insurer)

Regulation of insurance companies began with the Indian Life Assurance Companies Act, 1912. In 1938, all insurance companies were brought under regulation when a new Insurance Act was passed. It covered both life and non-life insurance companies. It clearly defined what would come under life and non-life insurance business. The Act also covered, among others, deposits, supervision of insurance companies, investments, commissions of agents and directors appointed by the policy-holders. This piece of legislation lost significance after the insurance business was nationalised in 1956 (life) and 1972 (non-life), respectively. When the market was opened again to private participation in 1999, the earlier Insurance Act of 1938 was reinstated as the backbone of the current legislation of insurance companies, as the IRDA Act of 1999 was superimposed on the 1938 Insurance Act. Most private companies had foreign participation up to the permissible limit of 26% of equity. One such charter worth special mention is the joint venture between the State Bank of India (SBI) and Cardif SA of France (the insurance arm of BNP Paribas Bank) SBI Life Insurance Company Limited. Since SBI is a bank, the Reserve Bank of India (RBI) needed to approve the SBIs participation because banks are allowed to enter other business on a case-by-case basis. It is also an encouraging sign that the authorities are ready to accommodate more diverse forms of corporate structures, as bancassurance will become an important channel for the distribution of insurance. At the same time, in a few joint ventures, Indian banks shared the domestic equity portion with other non-bank entities. It still remains to be seen how this new mode of corporate cooperation will develop going forward. The latest group to receive an outright charter for operating a life insurance company is the Sahara Group (on 5 March 2004). Saharas entry is notable for two reasons. Firstly, Sahara would be the first domestic corporation to enter the Indian life insurance market without any foreign partner. Secondly, it would become the first non-banking financial company to operate in the life insurance sector. In the non-life insurance sector, there were 14 companies operating in India by mid-2004. Six of them are public-sector companies, of which four were former subsidiaries of the GIC that operated as nationalised companies, and the other two are the Export Credit Guarantee Corporation Limited and the Agriculture Insurance Company of India Limited. The rest are private-sector companies. Most of these private-sector companies have foreign partners with a maximum of 26% of shares, but there are also purely domestic companies (eg Reliance General Insurance Company Limited).

Life insurance business

When the life insurance business was nationalised in 1956, there were 154 Indian life insurance companies. In addition, there were 16 non-Indian insurance companies and 75 provident societies also issuing life insurance policies. Most of these policies were centred in the metropolitan areas like Bombay, Calcutta, Delhi and Madras. The life insurance business was nationalised in 1956 with the Life Insurance Corporation of India (LIC) designated the sole provider its monopolistic status was revoked in 1999. There were several reasons behind the nationalisation decision. Firstly, the government wanted to channel more resources to national development programmes. Secondly, it sought to increase insurance market penetration through nationalisation. Thirdly, the government found the number of failures of insurance companies to be unacceptable. The government argued that the failures were the result of mismanagement and nationalisation would help to better protect policyholders. In nominal terms, during that period the total income of the LIC grew 700-fold. The largest part of payments to policyholders has been through the maturity of policies. This proportion has gone up over time, relative to death benefits. To a certain extent, this reflects the increasing popularity of life insurance products as savings vehicles in lieu of life protection. It can also be discerned that the operating costs (as percentage of premiums) remained high over a sustained period of time, with a decline in the past two decades. Part of this decline has come from the increased sale of group policies which are cheaper to sell per policy than individual life policies.

Non-life business
In 1972, non-life insurance was nationalised (with effect from 1 January 1973). At that time there were 107 general insurance companies. They were mainly large city oriented companies catering to the organised sector (trade and industry). They were of different sizes, operating at different levels of sophistication. Upon nationalisation, these businesses were assigned to the four subsidiaries (roughly of equal size) of the General Insurance Corporation of India (GIC). There were several goals in setting up this structure. Firstly, the subsidiary companies were expected to set up standards of conduct, sound practices and provision of efficient customer service in general insurance business. Secondly, the GIC was to help control the expenses of the subsidiaries. Thirdly, it was to help with the investment of funds for its four subsidiaries. Fourthly, it was to bring general insurance to the rural areas of the country, by distributing business to the four subsidiaries, each operating in different areas in India. Fifthly, the GIC was also designated the national reinsurer. By law, all domestic insurers were to cede 20% of their gross direct premium in India to the GIC. The idea was to retain as much risk as possible domestically. This was in turn motivated by the desire to minimise the expenditure on foreign exchange. Sixthly, all four subsidiaries were supposed to compete with one another.

After the passage of the 1999 IRDA Act, the GIC was de-linked from its four subsidiaries. Each subsidiary, with their headquarters based in the four largest metropolitan areas, became independent. The only function the GIC retained was that of national reinsurer. However, the government still remains the sole owner of the four former GIC subsidiaries.

The Regulatory Regime

After the release of the Malhotra Committee report in 1994, changes in the insurance industry appeared imminent. Unfortunately, changes in the central government slowed down the process. The dramatic climax came on 7 December 1999 when the government finally passed the Insurance Regulatory and Development Authority (IRDA) Act. This Act repealed the monopoly conferred to the Life Insurance Corporation in 1956 and to the General Insurance Corporation in 1972. The authority created by the Act is called the Insurance Regulatory and Development Authority (IRDA).

Features of the 1999 IRDA Act

The IRDA Act, 1999, sets out details of registration of an insurance company along with renewal requirements. The minimum capital requirement for direct non-life and life insurance business is 100 crores (ie INR 1 billion). The IRDA regulates the entry and exit of players, capital norms, and maintains a strict watch on the equity and solvency situation of insurers. Should an application be rejected, the applicant will have to wait for a minimum of two years to make another proposal, which will have to be with a new set of promoters and for a different class of business.

For renewal, it stipulates a fee of one-fifth of one percent of total gross premiums written direct by an insurer in India during the financial year preceding the renewal year. It also seeks to give a detailed background for each of the following key personnel: chief executive, chief marketing officer, appointed actuary, chief investment officer, chief of internal audit and chief finance officer. Details of the sales force, activities in rural business and projected values of each line of business are also required. Further, the Act sets out the reinsurance requirement for (general) insurance business. For all general insurance a compulsory cession of 20%, regardless of the line of business, to the General Insurance Corporation (the designated national reinsurer) is stipulated. Currently, India allows foreign insurers to enter the market in the form of a joint venture with a local partner, while holding no more than 26% of the companys shares. Compared to the other regional markets, India has more stringent restrictions on foreign access.

Solvency controls
General insurance business lines that are subject to tariffs include fire, motor, marine hull, tea crop, engineering, industrial all risks, business interruption, personal accident and workers compensation. Tariffs are managed by the Tariff Advisory Committee. In addition, insurers have to observe the required solvency margin (RSM). For general insurers, this is the higher of RSM-1 or RSM-2, where RSM-1 is based on 20% of the higher of (i) gross premiums multiplied by a factor A,21 or (ii) net premiums; RSM-2 is based on 30% of the higher of (i) gross net incurred claims multiplied by a factor B, or (ii) net incurred claims; there is also a lower limit of INR 500 million for the RSM. Life insurers have to observe the solvency ratio, defined as the ratio of the amount of available solvency margin to the amount of required solvency margin: the required solvency margin is based on mathematical reserves and sum at risk, and the assets of the policyholders fund; The available solvency margin is the excess of the value of assets over the value of life insurance liabilities and other liabilities of policyholders and shareholders funds.

Business conduct
The IRDA Act also prescribes guidelines and regulations on business conduct. It specified the creation and functioning of an Insurance Advisory Committee that sets out relevant rules and regulation. Investment allocation and norms In 1958, Section 27A of the Insurance Act was modified to stipulate the following investment regime:

Central government market securities of not less than 20%; Loans to National Housing Bank including (a) above should be no less than 25%; In state government securities including (b) above should be no less than 50%; and In socially oriented sectors including the public sector, cooperative sector, house building by policyholders, own-your-own-home schemes including (c) above should be no less than 75%.

For General Insurance, Section 27B of the Insurance Act of 1938 was amended in 1976. The guideline for investment was set out as follows: (a) central government securities of no less than 25%; (b) state government and public sector bonds of no less than 10%; and (c) loans to state governments, various housing schemes of no less than 35%. The remaining 30% investment could be in the market sector in the form of equity, long-term loans, debentures and other forms of private sector investment. Other regulatory developments The following are a few new features of the regulatory regime introduced by the IRDA: Insurance agents are governed by the Licensing of Insurance Agents Regulations 2000 and the Licensing of Insurance Regulations (amendment) 2002. The IRDA has mandated minimum educational qualifications for all agents, together with training and examination requirements. Through a Government of India Notification dated 11 November 1998, the Insurance Ombudsman was created to address grievances of the insured customers and protect the interest of policyholders. They have jurisdiction in respect of personal lines of insurance where the contract value does not exceed INR 20 lakhs. Policyholder protection was enhanced through the enactment of the Protection of Policyholders Interests Regulations, 2002. It stipulates the responsibility of insurance companies to spell out clearly the terms and conditions of insurance policies as well as other details. For example, in life insurance, details of any riders attaching to the main policy have to be given to the policyholders.

Trends, Challenges & Risks Ahead

The beginning of this new era in the development of insurance industry saw proliferation of new products and distribution channels which promoted rapid growth of the industry.

The year 2011 brought in the beginning of a new decade for Indian Life Insurance industry. The preceding years were significant for the life insurance industry in India after the opening of the sector by the government. During the period 2000-2008, combined with Indias rapid rate of economic growth the Indian Life Insurance Industry gained its foothold in the country. Private sector insurers ventured into the country and the industry got a taste of market-driven competition, compared to the time when insurance business was dominated by only public sector insurers. The beginning of this new era in the development of insurance industry saw proliferation of new products and distribution channels which promoted rapid growth of the industry. The phase also witnessed continued regulatory action which is shaping the insurance industry currently. The regulatory changes introduced in September 2010 signalled the intent to shift the orientation of the industry for unbridled growth towards longer-term savings and protection and deliver more efficient propositions to consumers. There is also no doubt that the regulatory shifts had material impact on all life insurers in India. Given the above scenario, the current challenges in the life insurance industry have various factors guiding the market.

Environmental factors Domestic economic conditions No matter how well-managed or financially sound a given insurer might be, none are immune to the effects of a contracting or slow growing economy. The double-digit inflation rate is an uncomfortable factor for the Indian economy. And the central bank of India, RBI, has the huge task of balancing the two controlling inflation without dampening growth too much. The interest rate and inflation trade-off is the central banks core business and the last one year has been a very difficult for the central bank. While the Reserve Bank of India (RBI) has been raising repo and reverse-repo rates consecutively every quarter in an attempt to manage inflation, it has not succeeded in moderating inflation. This probably implies that inflation is more of a real sector supply side issue than a monetary implication. Implications of this relatively high interest rate and high inflation regime are unlikely to be positive for the Insurance industry in general. On one hand it would be difficult for the life insurance industry to manage return expectations as they are likely to be high. In the high interest scenario, higher assured returns are required for increasing penetration while competing with fixed income products. While there may be some reduction in actual growth rates but India's long term fundamentals remain intact and Life Insurance being an industry with very long term horizon, it would be able to tide over the economic cycle. On the other hand inflation means lower disposal income in the hands of consumer leading to lower household savings which currently stands at a healthy 34.7%, though significantly lower than Chinas 50%. Global Economic conditions The other concerning factor is the rising crude oil prices and rupee depreciation. Domestic oil companies have upwardly revised prices very often. Secondly, the Euro crisis and the instability of the US economic conditions too will bring in a ripple effect on India, mainly on financial markets and import oriented industries. Connecting the two syndromes the exchange rate (rupee devaluation) impacts India through oil imports and increased prices of fuel and transport (which gets factored in inflation). It is almost a double whammy kind of situation inflation, whichever way it happens reduces disposable income and discretionary spend does get affected. On the other hand, exchange rate devaluation has some positive effects also such as higher exports (goods and services) and increased employment which would hold good for the insurance industry in the long run. Consumer related challenges Low financial literacy and poor access to financial services in India pose a problem in penetration of the right kinds of life insurance products - more in terms of the right mix of savings and protection. This is combined with the fact that consumers and distributors both lack understanding of the true purpose of life insurance. Consumers are not clued in about their life stage needs, and the product solutions suitable for such needs. The distributor, armed with an array of products is also unable to give proper insurance guidance to the consumer due to limited knowledge of the true purpose of each financial instrument. This leads to mis-selling, which is a huge negative factor for the life insurance industry.

The MNYL-NCAER India Financial Protection Survey done in collaboration with Max New York Life Insurance had yielded some worrisome results. The research had revealed the problem of uninsured and underinsured Indian households. At an all-India level, for all insured households, while the average sum-assured of a life insurance policy is Rs 1,14,450, the average premium paid is Rs 5,007 only. The awareness level about life insurance is higher for people in the older age group. It is important for consumers across demography to understand the true value of life insurance. In India, there is hardly any state supported social security system. The number of Indians over the age of 60 will grow to more than 21.8 crore in 2030. Today, at the age of 60, an Indian has an expected life up to 75 years by 2020 an individual of 60 will have an expected life up to 80 years of age. According to studies, only about 11% of Indias working population has an y form of social security at all. Life Insurance is best suited to help consumers overcome this problem. While the industry will have to develop suitable products, it also has to overcome the challenge of lack of awareness of this issue. The key is to start as early as possible and sticking to the plan. Distribution Challenge India is a diverse country with various languages, food, culture, spending and saving patterns. Historically, the majority of life insurance players have followed a national strategy, with largely similar distribution and operating models across geographies. Going forward, with increasing economic pressures, players will need to make very conscious choices about where and how to compete. While advice based sales through agency distribution remains the most suitable distribution channel, to expand the reach there is a need to utilize the existing retail distribution networks available in the country. This may require simplified product designs to promote OTC life insurance solutions. For bancassurance, even though an open architecture will provide better choice for the consumer, in the Indian context it also needs to be viewed from societal perspective. Access to customers and quality of customer relationship should be the primary focus of the channels. It needs to develop in terms of grievance redressal and knowledge pool. The banks are not yet equipped to handle complex customer requirements with increasingly sophisticated products being launched by the life insurance companies. Notably, increasing the number of partners may not lead to increase in insurance penetration and/or financial inclusion. The number of bank branches across the country will anyway remain the same even with two insurers. Impact of regulatory changes and the new challenges it poses The regulatory changes that have been implemented in the past two years included ULIPs regulation that brought in a price control taking flexibility away from life insurers. This influenced distributors commission. In fact, India has now the lowest commission rates for agent advisors. It is imperative for agents to be motivated as they are the faces of life insurance companies. In order to build a career-agency model, adequate compensation is critical.

The regulator IRDA has also tightened the performance criteria for agents in its effort to improve the persistency ratio in the industry. The agents have to ensure that the average annual persistency ratio should be 50 per cent. Though good for the industry in the long run, this poses a challenge for many agents in the interim. Another big challenge is attracting committed and quality talent to the industry. It is important to have good quality sales managers and agent advisors to ensure need-based selling and rightselling. This will require behavioural change in agent advisors so that products are not mis-sold. Life Insurers need to impart training to advisors to address this challenge. Max New York Life Insurance invests significantly into the training of agent advisors through pre-licensing training for around 100 hours instead of the stipulated 50 hours by IRDA and a continued course curriculum of 250 hours in the first 2 years. The latest draft of the DTC has suggested removing or reducing certain tax incentives from Indian life insurance products. It is these tax breaks alone that explain why the life penetration rate of 4.4% in India is higher than in China (2.5%) and even the US (3.5%). Implementation of DTC in its current form, especially with the no-grandfathering provision, does not bode too well for the industrys long-term growth outlook. While it is important that the life insurance industry is well regulated in terms of providing value for money or benefit to the insured/consumer, the regulator also needs to ensure that the business of insurance is profitable and earns adequate return on investment. It is extremely important, as it plays an important role in deepening the financial sector of the country. Life insurance industry also provides long-term infrastructure funds by routing small savings to longterm investments. In addition, the government also needs to make suitable interventions and facilitate business models for increasing financial inclusion through micro finance, micro insurance and social security /safety net mechanisms. Perceptions of influencers Another major challenge is posed by the media and influencers. Often, the life insurance industry is portrayed in a negative manner and hence the consumers become sceptical of the life insurance industry. The result is that, they may not purchase life insurance, even though a legitimate need exists. The fact the life insurance promotes a regular routine of small savings for long term savings and protection is not propagated. It is important for media and third-party influencers to look at the bigger picture on life insurance. They must understand that life insurance products should not be compared to any other financial products on calculated returns alone. They should also take into consideration, the discipline life insurance instils in the financial planning.

The Way forward As mentioned earlier, Life Insurance is critical for the development of Indian economy. Apart from a brief dip in FY 2009 due to downturn, the industry has grown around 20 per cent per annum. In the first decade of privatisation the insurance penetration has doubled, which has all going for it to only rise significantly in a country of 1.2 billion people. Post the global financial crisis financial capital infusion by foreign partners has considerably slowed down; from Rs 8,170 core in 2008-9 to less than Rs 2,300 crore in 2010-11. For a capital intensive business like life insurance, the trickling down of capital severely impacts growth and also changes the strategy that the company adopts with its business. The fabled increase in the insurance FDI limit from 26% to 49% (consistent with banks sector) is on hold currently till the next parliamentary session. The much debated issue on allowing insurers to tap the capital markets has also not resulted into anything significant with regulatory roadblocks delaying clarity on companies floating an IPO. However, all is not lost. The Indian life insurance industrys biggest advantage is the countrys favourable demographics. Market penetration will be guided by the rise in income levels. From 80 per cent policy renewals in early 2000s, today only about 65 per cent policies come up for renewal after the first year. The working population (25 60 years) is expected to increase from 675.8 million to 795.5 million by 2025 with the projected per capita GDP expected to increase to Rs 100,680 in 2025, which is indicative of rising disposable incomes. Indians are inclined towards savings and research has shown that life insurance is th e first financial product majority turn to. And it is high time that the regulator, consumer bodies and the insurance companies collaborate together to yield effective and measurable results. With increasing levels of income, higher cost of living and longer life expectancy, the Indian consumer will require innovative products that will cater to wealth management, protection and retirement solutions. For insurance companies, profit from innovation will be integral to driving success, and technology will help insurers to develop and customize products to befit individual needs. Consumers are increasingly becoming multi-channel in terms if their interaction with financial institutions. To buy insurance products, insurers will have to gear up with robust IT solutions to cater to that need. There will be need of proper financial planning for the Indian consumer. And hence, need for quality of advice in managing their financial need will be critical. Insurance agent advisors need to be trained and be their primary source of financial advisor. The customer-agent relation needs to be deepened by suggesting life-stage related selling. It is time for various stakeholders life insurers, regulators, distributors and consumer groups to come together to build a robust life insurance sector in India which will help create a secured society.

FDI in Insurance
The Union Cabinet granted approval for increase of foreign direct investment (FDI) limit in the insurance sector from the present 26 per cent to 49 per cent. Alongside, it also cleared amendments aimed at attracting investments and bringing transparency in the working of the insurance companies. The Cabinet approved amendments to the Insurance Laws (Amendment), Bill, 2008, pending in the Rajya Sabha. These amendments are aimed at removing archaic and redundant provisions in the legislations and incorporating certain provisions to provide the Insurance Regulatory Development Authority (IRDA) with flexibility to discharge its functions effectively and efficiently. The overall objective is to further deepen the reform process which is already underway in the insurance sector, an official statement said here. The approved amendments include that the foreign equity cap is proposed to be kept at 49 per cent as provided in the Insurance Laws (Amendment) Bill, 2008, as against the 26 percent. This is done to meet the growing capital requirement of insurance companies. Foreign reinsurers will be permitted to open branches only for re-insurance business in India and the provisions of Section 27E, which prohibits an insurer to invest directly or indirectly outside India the funds of policy holder, would apply to such branches. To encourage health insurance in India, the capital requirement for a health insurance company is now proposed at Rs.50 crore (instead of Rs.100 crore for general insurance companies) with a view to reducing the entry barrier to a priority sector in the insurance space. The government has also revised the definition of health insurance business to clea rly stipulate that health insurance policies would cover sickness benefits on account of domestic as well as international travel. Regarding the obligatory underwriting of third party risk on motor vehicles, a separate Motor Vehicle Insurance and Compensation Legislation is being proposed by the government and the concerns of the Standing Committee regarding the obligatory third-party insurance on motor vehicles will be taken care of, the statement said. The public sector general insurance companies and the GIC will be permitted to raise capital from the market to meet the future capital requirements, provided that the governments shareholding would not be allowed to come below 51 per cent at any point of time. To improve the functioning of surveyors and bring in greater transparency, certain modifications are made to provide for regulations on qualifications regarding appointment of surveyors and to strengthen the Institute of Indian Insurance Surveyors and Loss Assessors (IIISLA). The amendments proposed in the Bill seek to do away with the existing statutory prescriptions pertaining to licensing insurance surveyors and loss assessors etc. and leave these issues to be addressed by way of regulations.

REFERENCES Indian insurance industry- the road ahead by KPMG