Insurance market regulator IRDA has given nod to insurance companies with sound financial health and a minimum of three years of operations to set up business in other countries.
The long pending demand is likely to cheer the insurers which had been seeking approval to open foreign insurance companies, as well as branch offices abroad to exploit markets overseas.
The Insurance Regulatory and Development Authority (Irda) has issued guidelines for Indian companies to set up life, general or reinsurance business abroad. As per the norms, life and general insurance companies with a minimum net worth of Rs 500 crore and Rs 250 crore, respectively, can apply for setting up of foreign business. In the case of reinsurance companies, the net worth should be Rs 750 crore.
"The registered Indian insurance company should have been in operations for at least 3 years," the guidelines said.
An insurer desirous of setting up foreign company or branch should have earned profits for the three years out of the past five years, it said.
The guidelines also said the Indian insurers should formulate an 'Investment Policy' to suit the scale, nature and area of operations of the foreign branch offices.