Question: MoU between India and USA has been approved by which of the following regulatory bodies?
(a)IRDA & FIO
(b)IRDA & FAO
(c) IRDA & FAI
(d)IRDA & FIA
- On 29 August, 2018, Union Cabinet has approved a Memorandum of Understanding (MoU) between Insurance Regulatory and Development Authority of India (IRDAI) and the Federal Insurance Office, USA.
- The MoU provides a framework for cooperation and coordination on various regulatory functions.
- India and USA have also consented on facilitating cooperation on international standard-setting activities, financial stability and the development and implementation of consumer protection through sound prudential regulation of the insurance sector.
About IRDA & FIO:
- 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 provided with the authority to monitor all aspects of the insurance sector and to represent the USA on prudential aspects of international insurance.
- USA is the leading contributor of foreign direct investment in India and many insurance companies have set up joint venture with USA based insurance companies.
- With increase in foreign investment cap to 49%, there is significant scope for foreign investments in Indian insurance sector particularly from USA based companies.