L&T has received initial approval from IRDA and may start its general insurance business in the first quarter of FY11
Engineering and construction major Larsen and Toubro Ltd (L&T) is likely to start its general insurance business in the first quarter of the next fiscal following preliminary approval from the Insurance Regulatory and Development Authority (IRDA).
IRDA member R Kannan told PTI that the insurance watchdog had given its initial R1 approval to L&T and the company would take at least three-four months to start the venture.
"In its board meeting, IRDA has given R1 approval to L&T for its general insurance venture," Mr Kannan said.
According to L&T's senior vice president (financial services) N Sivaraman, the venture would be operational in the first half of the next fiscal subject to regulatory approval.
The proposed insurance firm would begin operations with paid-up capital between Rs110 crore and Rs120 crore, he said. "We expect that the share capital to go up to Rs500 crore in the next five years depending on business growth," Mr Sivaraman added.
L&T has already put in place top management for the proposed venture. Joydeep Roy will head L&T General Insurance Co.
R1 is the preliminary approval given by IRDA, wherein the regulator evaluates the promoters. There are three stages of approval required for getting a licence for an insurance company.
In the second stage (R2), IRDA looks into the business model of the company and in the third (R3), at the formation of the company.
There are currently 22 non-life insurance players, including four public sector companies, in the country.
Besides, the IRDA gave R2 approval to health insurance company Max Bupa Health Insurance, Mr Kannan added. Max Bupa is a joint venture between Max India and UK-based Bupa Group.
Max Bupa is likely to start operations from next month after getting the R3 approval. The company had received initial approval in November last year.
It would be the third company to provide only health insurance after Star Health-Allied Insurance and Apollo Munich Health Insurance.
The CIC has said that NCDEX, which trades in agricultural commodity futures, does not come under the ambit of the RTI Act and is not liable to provide any information under this legislation
The National Commodity and Derivative Exchange Ltd (NCDEX), which trades in agricultural commodity futures, does not come under the ambit of the Right to Information (RTI) Act and is not liable to provide any information under it, the Central Information Commission (CIC) has held, reports PTI.
The Commission said that NCDEX does not receive any direct or indirect funding by the government, one of the mandatory requirements to bring an organisation under the transparency law.
"Despite the fact that 46% of the equity capital of NCDEX is held by public sector undertakings (PSUs), NCDEX cannot be said to be a 'public authority' as there is no direct or indirect funding by an 'appropriate government'."
"We, therefore, hold that NCDEX is not a public authority and is, therefore, not liable to provide any information under the RTI Act," information commissioner ML Sharma said in a recent order.
The case pertains to Jodhpur-based RTI applicant Indubala Agrawal who sought details of some records from the exchange, which in turn rejected the request, saying it was not a public authority as per the RTI Act.
Anil Agrawal, who was representing Indubala during the hearing, pleaded before the Commission that the exchange has been "notified" vide notification under the Forward Contracts (Regulation Act), 1952.
Mr Agrawal said since NCDEX has been created by a government notification, it fulfils one of the mandatory criteria for bringing an organisation under the Act and hence it should provide all the information to him.
NCDEX, which commenced futures trading in agricultural commodities from December 2003, was 'recognised' by the government of India on the recommendation of the Future Markets Commission.
Mr Agrawal said that equity participation by public sector companies amounts to indirect government financing as its money is channelized through these companies.
Even if it is held that equity participation of PSUs is only 46%, this may be reasonably interpreted to mean "substantial financing" as mentioned in the RTI Act, the counsel said.
The CIC did not consider the argument that the exchange is created by a government notification and drew parallels with the case of Infrastructure Leasing and Financial Services Ltd (IL&FS), which was earlier exempted from disclosure under the RTI Act by it.