Privatisation and Foreign Participation in (Life) Insurance Sector

The macroeconomic implications of privatisation and foreign participation in the insurance sector, especially the life insurance sector, are far-reaching as the life insurance industry, coterminous with the Life Insurance Corporation (LIC) of India, is dominant in two aspects: pooling and redistributing risks across millions of policyholders and performing financial intermediation. The issue of privatisation and foreign participation must be approached cautiously with a 'step-by-step approach', and should be preceded by microeconomic institutional and legal reforms.