The Indian union cabinet has approved the signing of a memorandum of understanding (MoU) between the IRDAI and the Federal Insurance Office (FIO) of the US.
Framework for cooperation and coordination
According to a statement issued by Press Information Bureau of Government of India yesterday, the MoU provides a framework for cooperation and coordination, including for the exchange of information and research assistance with respect to each regulator's overview and other lawful responsibilities.
Under the agreement, both countries intend to share their experiences on various regulatory functions and to provide mutual assistance including training activities.
Collaboration in many areas of insurance sector
India and the US 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.
Opening up lots of possibilities for investment in Indian insurance
The US is one of the major contributors of foreign direct investment in India and many companies have set up joint ventures with US based insurers.
With the foreign investment cap in Indian insurance sector at 49%, there is tremendous scope for foreign investments in Indian insurance sector particularly from US based companies. Hence the bilateral MoU between IRDAI and FIO holds lot of potential for the two countries.