Magma HDI General Insurance a step closer to kick-starting insurance biz

Magma Fincorp Ltd is one step closer to getting its general insurance venture operational. After almost three years Magma has got R2 licence from the Insurance Regulatory and Development Authority (IRDA).

In July 2009, Magma had signed a joint venture agreement with Germany-based HDI-Gerling International Holding AG for its foray into general insurance business.

The joint venture company — Magma HDI General Insurance Company Ltd — had received Reserve Bank of India's approval in October 2009. The company also received R1 licence from the IRDA in April 2011.

R1, R2 and R3 are the three approvals required by an insurance company to kick-start operations in the country.

While R1 is an in-principle approval which basically means the company's business plans will be considered by the regulator for approval, R2 is cleared only when the regulator is satisfied with the company's strategy, business plans and credentials.

R3 is the final step, which, once granted, allows the company to start operations.