New Delhi: The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the signing of a Memorandum of Understanding (MoU) between Insurance Regulatory, Development Authority of India (IRDAI) and the Federal Insurance Office, USA.
The MoU will provide a framework for cooperation and coordination, including for the exchange of information and research assistance with respect to each Authority’s overview and other lawful responsibilities.
Under the agreement, both the countries intend to share their experiences on various regulatory functions and to provide mutual assistance including training activities.
The two countries have also agreed to continue to facilitate cooperation on international standard-setting activities, financial stability and the development and implementation of consumer protection through sound prudential regulation of the insurance sector.
India and USA have strong business relations with each other and have been in regular discussions at various political and official levels. Various institutional mechanisms have also been put in place over time to strengthen bilateral cooperation on wide-ranging multi-sectoral issues.
The USA is one of the major contributors of foreign direct investment in India and many insurance companies have set up a joint venture with USA based insurance companies.
With an increase in foreign investment cap to 49 percent, there is further scope for foreign investments in the Indian insurance sector, particularly from USA based companies. Hence the bilateral MoU between IRDAI and FIO, USA holds a lot of potential for the two countries.