After a delay of three months, the insurance regulator IRDAI has approved preliminary licenses, known as R1, of a few players including Indiabulls, which has Laxmi still tycoon Laxmi Naryan Mittal as one of the promoters.
The IRDAI’s board, which met on last Friday, has approved these initial licenses which were pending for a few months.
With entry rather re-entry of Indiabulls, the Indian life insurance industry, that has seen many ups and downs in the last eight years, has seen a new player after gap of six years.
Earlier, it had tied up with Societe Generale to enter the sector, but had shelved the plans afterwards.
“Yes, we are aware of IRDA’s decision on giving us R1 but haven’t received any formal letter from the regulator as yet. Our blueprint for the life insurance business is ready and would be implemented them immediately.’’ said a senior official of Indiabulls.
Indiabuills is now planning to apply for the next level of approvals, known as R2, by Feb 2019 when the next IRDA board meeting is expected to take place.
Also, the country’s first dental insurance company OCARE set up by Neeraj Seth, a dentist by profession, that received its R1 license in July, will apply for the R2 in Feb.
The insurer has a capital of Rs 230 crore
Currently, the company earns a large amount of commission by selling life insurance products of other companies and may be one of the reasons for reentering the sector..
A life insurance company minimum takes 8- 10 years to break even in India and except Shriram Life, all the private sector life insurers have taken that long or much longer to break even.
The last life insurance licence was issued in 2012 to a joint venture between Ergo, a Munich Re group company, and the Avantha Group, an Indian business conglomerate led by Gautam Thapar. The venture was called off five years after receiving the preliminary licence.
The parent company of the applicant is Indiabulls Integrated Services Ltd (IISL). IISL is not related to Indiabulls Housing Finance
Indianbulls is yet to unveil other details like whether it would like to have a foreign partner and what kind of products it would sell or distribution strategies it would adopt.