Foreign insurance companies are optimistic about starting operations by January 2000, encouraged by the statements made by government officials and politicians at the Confederation of Indian Industry's insurance conference that ended on Wednesday. The mood at this week's conference was in contrast to the one last year (also in the month of August) when the majority of the delegates abandoned the post-lunch session of the conference dismayed by the dramatic withdrawal of the Insurance Regulatory Authority (IRA) Bill from Parliament by the then United Front government.
About a dozen foreign companies, awaiting government nod on private participation, have already identified Indian partners and opened representative offices in the country. "The statements by both insurance secretary B K Chaturvedi and IRA chairman N Rangachary have been positive and, for the first time, the government came out with specifics once the sector is opened up for competition," delegates said. "Also, Deora (chairman of the standing committee on finance) said in his speech that the Congress is in favour of private participation in the sector. This time around, the mood is certainly different and things seem to moving forward," a foreign insurer said.
An official at a British insurance company said: "The companies are now revising their project schedule to begin operations from January 1, 2000. That seems to be the earliest possible optimistic date. We know it is a political decision, but I guess we should see some of the first licences being issued by the year 2000." "The issues until this conference was whether the sector should be opened up or not. The question now is when. That is a sign of moving in the right direction," the officials said. "The longer the government takes, the more sure one can be of the reforms undertaken," they added. The government has already announced its decision to open up the sector, but the issue of foreign investment ceiling in Indian private insurance companies has been referred to a group of ministers.