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2010 has been year full of challenges. Starting from dispute among Irda Vs Sebi over Ulips. Insurance amendment bill faced opposition from many opposition parties. Industry also saw protest by all India insurance employees on the government plan to increase cap on FDI in insurance sector. 

This time government & standing committee in finance have started discussion with other insurers, bankers and regulators on insurance reform. Which as given hope that the impending changes will be presented in parliament in this budget session and will be implemented with clear direction. 

Insurance Industries Expectations from  Budget of (11-12).

Insurance business which heavily dependent on capital inflow. Foreign Direct Investment and Capital market are two major sources capital in any industry. Insurance industry is looking forward to budget 2012 with hope that this needs will be satisfied in budget. 

The current cap of FDI for insurance is 26% where industry expects it to be increase by 49% which will provide enough incentives to foreign players to invest in Indian insurance industry. 

Government owned insurers are in the need of capital to expand the business which can be possible by tapping capital market. Therefore there has been strong demand to allow govt. owned insurers to raise fund from capital market. 

Industry also expects more clarity on pension reform bill, which will facilitate new pension system based on defined contribution which is open to all Indian citizens. 

Insurance companies also expect changes on regulation on initial public offering (IPO). As per the current regulations only 10 or more year’s old insurance company can raise capital from IPO. This is preventing many good insurers from stock market listing although they fulfil Sebi’s requirements.  

Industry also wishes that minimum capital requirement should be reduced from Rs 100 crore to Rs.50 crore so that more players and small companies can enter and tap vast insurance sector. 

Like every year Insurance industry has lots of big expectation from the upcoming budget (2011-2012). The discussions on many issues has already taken place now lets hope upcoming budget bring good changes and will satisfy the industries expectations.