The Insurance and Regulatory Development Authority (IRDA) has sent a draft guideline on health insurance to the finance ministry. It is learnt that the regulator has urged the government to fix the foreign direct investment level at 51% for the health insurance sector.

A senior official at IRDA said the regulator has sent the recommendations on the health insurance separately. It would, however, submit its draft on the amendment of the Insurance Act by the month end.

IRDA wants the government to handle the health insurance sector separately, though for life and general insurance sectors, the proposal is to increase the FDI limit to 49% from the current 26%. “We want the FDI limit to be fixed at 51% in a bid to provide a push to this segment,” said the official.

The regulator is also of the opinion that the minimum capital base requirement should be around Rs 50 crore. “This would help more payers to come into the sector,” the official pointed out.

It may be noted that there is pressure on the finance ministry to develop the health insurance sector, as a large number of foreign companies are already waiting in the wings to enter the Indian market.

That apart, health insurance products are primarily sold in the urban areas at present, though the focus should be to promote such products in the semi-urban and rural areas, an analyst said, adding that tier-II cities like Pune and Jaipur pose huge opportunities for the companies.

However, the Left parties are opposed to an increase in the FDI limit in the insurance sector. Though the government had proposed to increase the limit in the life and general insurance sectors to 49%, it has not been able to make any concrete move.

(www.financialexpress.com)