Bank of Baroda insurance JV to start ops by Dec

MUMBA (Reuters) - Bank of Baroda's life insurance joint venture with Andhra Bank and UK's Legal and General Group PLC will start operations from December, a top official said on Monday.

"We have got final approval from the insurance regulatory authority to start operations," Chairman and Managing Director M.D. Mallya told reporters.

Bank of Baroda has 44 percent in the JV, IndiaFirst Life Insurance Co Ltd, while Andhra Bank holds 30 percent and Legal and General the rest.

Life insurance penetration in India is about 4 percent of GDP, in terms of total premiums underwritten in a year, compared with 2.4 percent in China and about 13.5 percent in the UK.

The company is the latest in a string of tie-ups of foreign players and Indian institutions as global insurers seek to tap the under-penetrated market.

India's current laws cap foreign investment in insurance at 26 percent and prevents insurers from entering the stock market in the first 10 years of their operations in the country.

India's parliament is considering a law to raise the foreign-investment limit to 49 percent.

The initial paid-up capital of the insurance venture would be 2 billion rupees, Mallya said.

The founders plan to raise paid-up capital to 25 billion rupees in the next 10 years as the newly-formed firm expands operations, P Nandagopal, chief executive officer, IndiaFirst Life Insurance, said.