New Delhi: The Insurance Regulatory and Development Authority (IRDA) is against hiking of foreign direct investment (FDI) limit in the sector to 49 per cent as it might render Indian promoters to lose management control in their insurance ventures after 10 years.

The government has recently consulted IRDA on the N K Singh panel's suggestion of hiking FDI limit in insurance to 49 per cent from 26 per cent, to which the regulator expressed its apprehension.

"Any decision on FDI will be taken by the government only. But the 26 per cent FDI limit has not been any hindrance to foreign players to come to India," IRDA Chairman N Rangachar said on the sidelines of International Banking Summit in New Delhi.

He said the Section 6AA of IRDA Act provides that Indian promoters have to bring down their stakes to 26 per cent after 10 years of operations, which is equal to that of foreign partner, through initial public offers.

"If the foreign company is allowed to hike its stake to 49 per cent, then what will the Indian promoter do after the insurance companies get listed in stock exchanges with a public holding of 48 per cent after 10 years," the IRDA chief said pointing to a situation where Indian promoters becoming minority stakeholder and losing management control.

He also said that the regulator was not considering any relaxation for entry-level capital requirement for health insurance companies.

PTI