India considering legal changes to boost $731 bln insurance sector

India is considering rule changes to bolster insurance penetration in the country as more companies, including foreigners, line up to enter the segment.

“Proposals for amendments to insurance laws include rationalized capital requirements, composite registration, one-time registration for intermediaries, value-added services by insurers, and sale of other financial products,” Debasish Panda, chairman of the Insurance Regulatory and Development Authority of India, told Bloomberg via email.

Insurance penetration remains abysmally low at less than 5 percent in the country of 1.4 billion people, signaling growth po-tential for investors.

The country allows overseas investors to hold up to 74 percent stake in insurers. Global firms such as American International Group Inc. and Prudential Financial Inc already have a presence in India through their local partners.

Four new firms have entered the nation’s insurance sector in the last year, and a few more are in various stages of enrollment, indicating the business environment is favorable, according to Panda.

Assets under management of insurance companies in India have crossed 60 trillion rupees ($731 billion) — bigger than the economy of many countries, including Poland and Sweden. The sector grew 13.7 percent in the year that ended March.

“The expanding middle class, young population, growing disposable incomes, and widespread usage of technology provide several prospects,” Panda said, adding the sector needs more technical capacities, expertise, technology, and capital.