Non-banking financial company Magma Fincorp, which has tied-up with a German insurance company to foray into general insurance, is hoping to start operations during the first half of next fiscal 2010-11.
Magma Fincorp and its associate company, Celica Developers, have formed a joint venture with German insurer, HDI-Gerling for general insurance business to be conducted through Magma HDI General Insurance.
“We have applied for R1 licence which is under consideration by the IRDA. We hope to start operations before September 2010,” Magma Fincorp’s Vice-Chairman and Managing Director Sanjay Chamria told PTI here.
There are three stages of approval required for getting a licence for an insurance company. R1 is the preliminary approval given by IRDA wherein the regulator evaluates the promoters.
In the second stage (R2), IRDA looks into the business model of the company and in the third (R3), it looks at the formation of the company.
In the JV formed, Magma Fincorp and Celica Developers hold a 37 per cent stake each while HDI Gerling holds 26 per cent.
The initial paid-capital of the company would be Rs. 110-crore.
There are 22 non-life insurance players, including 4 public sector companies in the country.
The last company which received a nod from the IRDA is SBI General Insurance.
SBI General Insurance is a joint venture between the country’s largest lender State Bank of India and Australia-based Insurance Australia Group (IAG).
Engineering and construction major, Larsen and Toubro (L&T), is also venturing into non-life sector and has formed a company-L&T General Insurance-which has also applied for a R1 licence from the IRDA.
