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August 13, 2014

Trinamool raises the issue of FDI in Insurance during Question Hour in RS

Trinamool Chief Whip Derek O'Brien todayraised the question of security of Indian insurers if foreign companies wereallowed to invest in India using the FDI route. Citing the example of Lehmanand AIG crash, he asked the Union Minister of Commerce in Rajya Sabha whatsteps the Government was intending to take to safeguard the interests of thosewho have insured in India.

Hereis the full transcript of his speech:

Say, an American or a Mauritius insurancecompany with the lot of capital decides to come to India through the FDI route.When we look at that from a company level the point of view it may seem likethe capital is enough. But, Sir, in Lehman kind of event, or AIG kind of crash,the US Government would seize all the capital of the existing Americancompanies. They don't need to take on the global risk policies holders acrossthe world. 

My question, Sir, is that will the ministercare to clarify on explain how the foreign company without dedicated operationsin India ensure that if something goes wrong like Lehman or AIG – where 80billion dollars had to be given by the US Government to AIG – that the capitalof the Indian Company will be available to take care of those who have insuredin India.

I hope the minister will answer. Thank you.