Lloyd's in talks with Irda to begin operations in India

Lloyd's, the UK-based re-insurer, has initiated talks with the Insurance Regulatory Development Authority (Irda) for starting operations in India and opening offices in the national capital.

"Lloyd's has informally approached Irda for expansion. They have been waiting for the passage of the Bill to take this forward," Irda chairman TS Vijayan told news agency PTI.

"Re-insurance industry is being opened up," he said adding that Lloyd's may be coming up with branches. Re-insurance is a business which provides insurance cover to insurance players.

The amended Insurance Bill, passed by Parliament last week, enables foreign re-insurers to set up branches in the country and defines re-insurance to mean 'the insurance of part of one insurer's risk by another insurer who accepts the risk for a mutually acceptable premium'.

It, thereby, excludes the possibility of 100 per cent ceding of risk to a re-insurer, which could lead to companies acting as front companies for other insurers.

Further, it enables Lloyd's and its members to operate in the country through setting up of branches for the purpose of re-insurance business or as investors in a domestic insurance company within the 49-per cent cap, according to an official statement by the Finance Ministry.

Irda will soon come out with separate regulations governing the insurance syndicates of Lloyd's and those who qualify under the norms would be allowed to operate. The norms would ensure policyholders interests relating to claims settlement.