First `insurance co-op' on cards

First `insurance co-op' on cards
EEB & PTI

MUMBAI/NEW DELHI, DEC 27: Even as a host of multinational insurance companies have lined to enter India, the National Cooperative Union of India (NCUI) will promote the country's first `insurance co-operative' to enter both life and non-life insurance following the opening up of the insurance sector to private companies and the co-operatives.

"We have decided to promote India's first `insurance co-operative to provide both life and non-life insurance services," NCUI president Ghabshyambhai H Amin said. This co-operative will be competing with nearly 30 foreign insurance firms apart from LIC and GIC. The insurance co-operative being floated by NCUI, the apex body of the Indian co-operative movement, would have co-operative land development banks, land mortgage banks and all state-level co-operative banks as members and the co-operative would be registered soon, he said.

While the draft Insurance Regulatory Authority Bill had not provided for the entry of co-operatives into the insurance sector, the amendedInsurance Regulatory Development Authority (IRDA), which was finally passed by Parliament early this month, has paved the way for co-operatives foray into all segments of insurance.

The proposal to enter insurance was approved by the December 18 annual general meeting of NCUI, which has a widespread co-operatives establishment network.

Amin said a final shape to the extent of involvement by different co-operative banks in the `insurance co-operative' would be given at the governing council meeting of NCUI to be held some time next month.

NCUI president said the Union would raise the initial equity investment requirement of Rs 100 crore from the member co-operatives planning to be part of the `insurance co-operative.' The Union has constituted a nine-member committee headed by Amin as the chairman and past president B S Vishwanathan as convenor to work out the strategy for co-operative's entry into the insurance. Asked whether the insurance co-operative would accept a foreign insurance company as apartner, Amin said "all options are open and a final decision would be taken only after discussing it with the final promoters."