NEWSLINKS
Y2K BIZ FEATURES
INDIA & THE W.T.O.
NEW GOVERNMENT
SPECIALS
INTERVIEWS
COMMENTARY
CREDIT POLICY
BUDGET 1999-2000
USEFUL INFO
ARCHIVES
SEARCH REDIFF

ING, Vysya Bank in insurance tie-up

A subsidiary of Dutch banking and insurance group ING has tied up with India's state-run Vysya Bank to enter India's insurance market.

"ING Insurance, a sub-holding company of ING group has entered into a memorandum of understanding with Vysya Bank," Yvo Metzelaar, ING Insurance's chief representative in India, told reporters in Bangalore.

"We are yet to find a third partner. We hope to announce that soon," Metzelaar said. India ended a 52-year state monopoly in the insurance sector in December last year, with the first licenses expected to be granted to private domestic and foreign players in the next few months.

The opening of the sector had been seen as a litmus test of the commitment of Prime Minister Atal Bihari Vajpayee's coalition government to pro-market reforms launched in 1991.

Foreign investors are allowed a maximum 26 per cent stake in insurance joint ventures.

Vysya Bank can hold a maximum 50 per cent stake, necessitating the need for a third partner.

"We want to get our feet wet with the life insurance business first and then move on to pension and value-added employee insurance schemes," Metzelaar said.

"We will offer a life insurance package along with the health component," he said.

Addressing an insurance conference in Bangalore, N. Rangachary, chief of India's insurance regulatory body, said Thursday that guidelines for insurance companies on protection of policy-holders would be announced early August.

"They will be broad guidelines which will be necessary for every insurance company to follow vis-a-vis the customers as to what sort of liabilities and obligation they have," Rangachary said.

Only 5 per cent of India's one billion people have life insurance and a 200-million strong middle class offers huge opportunities for investors in the sector.