Tuesday, October 22, 2013

Lloyd's conditions blow GIC Re entry plan

Lloyd's of London, the world's specialist insurance market has put conditions for the Indian reinsurer General Insurance Corporation of India's (GIC Re) entry into the Lloyd's market. According to a top official at Lloyd's, the Indian reinsurer can think of joining Lloyd's market only if the Indian government hikes the investment ceiling in insurance sector for foreign players.

Lloyd's of London, also called Lloyd's, is not an insurance company; it's a market located in London's primary financial district, the City of London. Insurance companies at Lloyd's join together as syndicates to insure risks.

When the spokesperson at Lloyd's asked if there is any condition from the Lloyd's side which can be a barrier in Indian reinsurer's effort to enter into Lloyd's market, he said, “Lloyd's does not talk about individual applications or expressions of interest to join the Lloyd's market."

Entry into the Lloyd's market is subject to Lloyd's approval and we have rigorous criteria against which all applications are considered. Each application will be considered on its individual merits, he added further.

The spokesperson at Lloyd's said Lloyd's is desperate to play its part in India's success story and we already provide important reinsurance support to the local market.

Mr. AK Roy, CMD, GIC Re had earlier said that the state-owned reinsurer is planning to acquire a syndicate - through which Lloyd's market does business - to strengthen its financial standing in the global reinsurance market.

The Insurance Bill (Amendment)-2008, which suggests hiking foreign direct investment ceiling in insurance sector to 49% from existing limit of 26, is still get parliamentary nod. Despite Congress led UPA government's keen interest, the pass could not passed due to fierce criticism and opposition of party. The Standing Committee on Finance is being headed by BJP leader Yashwant Sinha.

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