The Centre on Wednesday gave its approval for a Memorandum of Understanding (MoU) between Insurance Regulatory and Development Authority of India (IRDAI) and the Federal Insurance Office, USA.
The MoU approved by the Cabinet provides 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 will share their experiences on various regulatory functions and to provide mutual assistance including training activities. India and USA 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.
IRDAI is a body set up under the Insurance Regulatory and Development Authority Act, 1999 to regulate, promote and ensure orderly growth of the insurance and re-insurance business in India. Similarly, in USA, Federal Insurance Office (FIO) is vested with the authority to monitor all aspects of the insurance sector and to represent the USA on prudential aspects of international insurance.
The bilateral MoU between IRDAI and FIO, USA holds lot of potential for the two countries with an increase in foreign investment cap to 49 percent.