Speaking at the annual LOMA/LIMRA "Strategic Issues" Conference in Hong Kong, Chaturvedi says there would be no change to the regulations that now bar insurance companies from sending funds offshore.
"The exposure to offshore investment will be the same as the rules for insurers at present," she says.
The PFRDA bill, which will establish a defined contribution system targeting the 320 million workers of IndiaÆs "informal sector", is expected to be ratified by India's parliament by August, and at the latest by the year.
The new system will feature a point of service administrator, centralised record system, multiple fund managers and the PFRDA as regulator.
In terms of investment options, members will have a choice of fund manager and a range of investment options. While the Civil Service system is already up-and-running, the money cannot start being invested until the bill is ratified.
Chaturvedi says the regulator was also keen to establish a strong public-private sector partnership in India, where more than 320 million working people do not have any form of long-term savings.
"WeÆre expecting at least 20 million members to join within the first year, rising to nearer 40 million by 2010," she says. ôWe will need a strong relationship with the private sector to ensure this works properly.ö
On the basis of these calculations, she says, the life insurance market in India will be worth more than $90 billion by 2025. The most pessimistic forecasts still put the potential market at $40-50 billion.
India is not currently facing the enormous demographic changes that have burdened many economies with a "pensions time-bomb", with an average age of 26 and improving life expectancy.
Until recently India has had a defined benefit system, but enormous population growth has left the government with pension liabilities worth about 65% of IndiaÆs annual GDP, and growing in double digits each year.
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