The Government and the Insurance Regulatory and Development Authority (IRDA) have conveyed that foreign insurance companies who exit from domestic joint ventures midway would not be allowed re-entry.
Highly placed sources said that the Government and the insurance regulator had taken a stern view of US insurer Chubb Corporation's exit from the joint venture with HDFC, HDFC-Chubb General Insurance Company Ltd. The sources said: "We will prefer to have only long term players in the country."
HDFC, the majority stakeholder in the joint venture, recently bought-out the 26 per cent stake of Chubb Corporation in the venture.
The sources said as fallout of the split, applications of joint ventures , both in the general and life segments, are expected to be scrutinised more closely.
At least three public sector banks are preparing to foray into the life and non-life insurance businesses.
The scrutiny would involve ascertaining the ability of the joint venture partners to sustain the operation without breaching the solvency norms, and instability in the insurance markets. Currently, the IRDA's prescribed solvency norm is 150 per cent.
Highly placed sources said that the Government and the insurance regulator had taken a stern view of US insurer Chubb Corporation's exit from the joint venture with HDFC, HDFC-Chubb General Insurance Company Ltd. The sources said: "We will prefer to have only long term players in the country."