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ITI Gets Approval for Reinsurance Business


ITI Gets Approval for Reinsurance Business
IRDA gives R1 nod to company, which is a subsidiary of fortune financial services
 
MUMBAI: The insurance regulator has given the first level approval to ITI a company owned Sudhir Valia, for reinsurance business. Valia is the brother in law of billionaire Dilip Shanghvi, the promoter of Sun Pharma. 
 
The reinsurance market in India is estimated to be $2billion.
 
ITI investment is a subsidiary of fortune financial services, which is controlled by Valia.
Sources in India financial services sector said the board of the insurance regulatory and development. “ITI will set up a full-fledged reinsurance business here, said a senior official, who did not want to be named a spokesperson of fortune financial services confirmed the development to ET.
 
Reinsurance companies planning to set up a full-fledged business need to have a minimum capital of Rs.200crore while through branch would need at least 100 crore capital.
A few years ago, Sudhir Valia had acquired a majority stake in fortune financial services a non banking financial company.
 
Later, the finance company acquired ITI Investment, which had applied for reinsurance licence, sources said.  In 2015 when the rule were announced on reinsurance business, several global companies had applied to IRDAI seeking permission to start operations in India a market they currently cater to through offshore deals.  So far, IRDAI has given R1 Approval for setting up branch operation to four global companies – Germany’s Munich re and Hannover; Swiss re and the French firm SCOR.
 
In India, government owned GIC re is the only reinsurance company operating in India while global reinsurance companies sell covers from their overseas offices. GIC Reported 6% rise in net profit to Rs.2,694 crore in 2015-16.
 
A company can start reinsurance operation after they receive R2 approval from the insurance regulator. Insurance business requires three level of approval to being operations.
 
The shares of further financial closed at Rs.176, almost flat over Wednesday’s close.
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