Expert committee makes case for expanding scope of retail insurance business at GIFT city

MUMBAI: Non-resident Indians (NRIs) and People of Indian origins (PIOs) may soon be able buy insurance and reinsurance products from companies having shops at the Gujarat International Finance Tec-City (GIFT), Prime Minister Modi’s pet project that aims to attain stature in line with other global financial hubs.

An expert committee under the stewardship of former Corporate Affairs Secretary – Injeti Srinivas has submitted its second interim report expanding scope of retail insurance businesses.

“The IFSC can become an engine of economic growth for India,” said Pradip Shah, Chairman of the Expert Committee. The global opportunity for the Insurance sector is immense. The Indian insurance sector is underperforming compared to that of developed and emerging economies.”

“GIFT IFSC promises to offer a cost-effective and tax-efficient jurisdiction for insurance companies to set up operations there,” he said in a release Thursday.

The committee is christened as International Financial Services Centres Authority (IFSCA), which focuses on building international retail businesses locally.

“Permit NRIs/PIOs to buy Life Insurance policies for themselves as well as their family members who are based in India and abroad from companies set up in the IFSC and allow them to pay premium in the currency of their choice (including Indian rupees),” it said in its multi-pronged recommendations.

This report follows the first interim report, covering banking-related proposals which was submitted on September 11 earlier this year. Other key business verticals including asset management and capital markets will be covered in reports that the committee will submit in due course.

“Permit NRIs/PIOs to buy portable life insurance policies which offers them flexibility to pay premium in INR or in foreign currency, based on their choice, after they return to India,” the committee recommended.

Also, resident Indians should be allowed to buy overseas health insurance for themselves and their dependents in India and overseas from insurance companies or intermediaries in the IFSC for medical treatment anywhere in the world.

Insurance companies should be allowed to offer health insurance products to NRIs / PIOs including covering their family members who are based back in India.

The committee pitched for insurers setting up subsidiaries in IFSC, another move that should promote business.

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