The IRDAI is engaged in discussions with the government to ease the INR1bn ($12.2m) minimum capital requirement for new insurers. It also asks that the industry regulator be allowed to determine the amount of capital depending upon the business plans of the prospective insurers.
"The regulator can frame regulations based on the size of the company that the promoters are going to set up. For a microinsurance company, it may be X amount, regional companies operating in a bigger larger geography could be Y amount," IRDAI chairman Debasish Panda told Press Trust of India (PTI) in an interview. The objective is to enable entry into the Indian market of small, specialized, and niche players, which would help in increased insurance penetration and density in the country, reported PTI.
"Like in the banking system, we have microfinance institutions, regional banks, and small finance banks. So, we have all categories of banks. Then there are non-banking financial companies. In the insurance sector also, we should have different-sized players come into the market so that they can operate in smaller geographies," Mr. Panda said.