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Definition of Indian insurance cos vague
The Finance Minister's announcement of privatising the insurance sector has caused immense speculation about the thought behind it. The market is making various conjectures to ascertain the idea behind his statement. Meanwhile, foreign insurance companies are upbeat about the statement. They feel that the announcement indicated they could set up shop in India. Ajay Srinivasan of ICICI Prudential said it was unclear what the exact definition of Indian insurance agencies would be. One thing was certain that legally a foreign player could hold a minority stake in an Indian insurance company. Another scenario he saw was that the Indian partner went in for technical collaboration with the foreign players. While Sinha failed to clarify on his announcement even on Wednesday, the industry said according to the initial announcement Indian companies would have a tie-up with foreign players, while the management control and majority stake would be held by them. A major hurdle the industry foresee are the labour unions of the existing insurance companies, which had been stated by former finance minister P Chidambaram too. (Business Aaj Tak)