Merger and acquisition activity in two of Asia’s largest insurance industries has continued this week, with regulatory authorities in India and China approving new measures to allow foreign firms access to their lucrative emerging markets.
India’s Finance Ministry made an important move in granting local insurance firms greater flexibility in selling their shares. Indian insurance companies will no longer have to complete the prerequisite 10 years of operations before divesting and selling their domestic shares to foreign enterprises. The foreign direct investment cap will remain at 26 percent maximum ownership in India, but companies will now be able to meet those measurements, dilute their stake, and access greater overseas capital on their own timetable. The decision to adjust the requirement came after talks with the Ministry of Law and the Insurance Regulatory and Development Authority of India (IRDA).
Under current industry regulations, Indian insurance companies are allowed to offer a 26 percent maximum stake to foreign business partners when their joint venture operation is first incorporated. Acc
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