*Applaud Chidu initiatives but cheer awaits details: HDFC* *Amitabh Chaudhry, MD & CEO, HDFC Life in an interview to CNBC-TV18 explains the key issues that were discussed and the higlihghts of the finance minister's interaction with the captains of insurance sector. **A*fter meeting the captains of the insurance sector in September, finance minister (FM) P Chidambaram announced a slew of reforms to revive the sector. The finance minister has said that the insurance regulator (IRDA) will examine the use-and-file system for the approval of insurance products.
The regulator will design standard products that can be used by the industry. IRDA will evolve guidelines to reduce arbitrage between units and traditional products. The regulator will accept the KYC checks done by banks and will only mandate additional information from the policyholder. Sources in the finance ministry say that IRDA is in favour of allowing 49 percent FDI into the sector. Amitabh Chaudhry, MD and CEO, HDFC Life in an interview to CNBC-TV18 explains the key issues that were discussed and the higlihghts of the interaction with the finance minister. *Below is an edited transcript of the interview on CNBC-TV18.* *Q: The government and the FM is keen that FDI limit in insurance sector be hiked from the current 26 percent to 49 percent, the bill has to go though the Parliament and the government does not have the numbers at this point of time. So, does that materially change anything as far as the sector is concerned because the uncertainty continues on the FDI front?* *A:* I completely agree. The government has announced its intention to get the bill clear through the cabinet, but the bill has no meaning until it is passed by the Parliament. Considering the current political situation, the possibility of getting this bill passed looks like a remote possibility. It is an important statement, but it does not achieve anything till the act is passed by the Parliament. *Q: What could change or revive sentiment for this sector. The details which the finance ministry had mentioned are really material game changers for the sector. This business of moving from file and use to use and file, the devil is in the detail and the industry has been grappling with a similar change since 2007. Do you believe this will materially change things for the industry?* *A:* The fact that the finance minister has announced it and this has been based on a discussion with the FM, the ministry had with the regulator, hopefully this will lead to a real use and file kind of situation. Similar changes were stated in the past in various circulars, but in reality the product approvals are taking time. While we understand why they are taking time, the regulator wants to be very cautious before they approve any product. They want to dot all the i's and cross all the t's, but if they can come out with a guideline, which really moves to a situation where we use to move and file, it will benefit the industry. -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
