New Delhi, March 10 :     The Standing Committee on Finance wants the bill on the Insurance Regulatory Authority (IRA) amended to provide for a sharp increase in the solvency and deposit margins for insurance companies. The committee has also recommended in its report that the new insurance firms should be forced to undertake a percentage of business in rural and social sectors. The report drafted by Congress MP Murli Deora, who also chairs the committee, wants to open up insurance business to the co-operative sector and allow banks and corporates to work as insurance agents. It also wants the title of the bill itself to be renamed as Insurance Regulatory & Development Act. The report was finalised last week and is now being circulated to all committee members. The modified bill will be tabled in the Lok Sabha in April. The government is not bound to accept the recommendations. However, the feeling is that it will accept most of them. The report stipulates that insurance companies should not be allowed to function in more than one area ? life, general and re-insurance. The bill now under consideration of the Lok Sabha gives insurance companies the scope to undertake composite business. It also states that a single Indian promoter can hold up to 74 per cent at the time of incorporation. Currently, the act allows a total Indian promoter stake to be 74 per cent at time of incorporation but stipulates a single promoter can hold just 26 per cent. It also states that domestic promoters shall divest their stake in excess of 26 per cent in a phased manner within 10 years instead of six years as stipulated in the bill. The bill had stated 26 per cent or less as stipulated by the government. It seeks to rectify this by prescribing that the limit cannot be reduced below 26 per cent. The committee also feels that a 14 per stake for non-resident Indians, overseas corporate bodies (OCBs) and foreign institutional investors (FIIs) will ?amount to backdoor entry? by foreign companies to take their total stake to 40 per cent as foreign firms can hold stakes in FIIs or OCBs. It also wants to retain the minimum limit on paid-up capital at Rs 100 crore for life and non-life insurance companies. Re-insurers should have a Rs 200 crore paid-up capital. However, the minimum paid-up capital should exclude deposits and preliminary expenses, says the report. The report also states the current bill makes IRA subservient to the government and open to interference. To check this, it wants changes in the bill so that the IRA shall only be bound by government directions on policy matters, though not on technical and administrative policy. It also states that IRA must be asked to give its views before the government gives directions on any issue. The committee wants the limit for deposits to be kept with the Reserve Bank to be raised from the proposed Rs 10-20 lakh for life insurance firms to 1 per cent of the gross premium in a year subject to a limit of Rs 10 crore. For general insurance, it wants the limit raised to 3 per cent of total gross premium subject to a maximum of Rs 10 crore against a current level of Rs 10-20 lakh. For re-insurance, it wants deposits of Rs 20 crore. It also stipulates that no instalments should be allowed in paying up deposits. It wants the solvency margin to be raised. For life insurance firms, it should be either Rs 10 crore (Rs 20 crore in case of re-insurers) or 3 per cent of mathematical reserves adjusted for re-insurance, whichever is higher. In the case of general insurance companies, it has come up with three yardsticks ? Rs 50 crore (Rs 100 crore for re-insurers), 20 per cent of net premium, and 30 per cent of net incurred claims ? with the stipulation that the parameter that throws up the highest figure will apply. The committee wants the registration fee for firms to also be raised. The fee for initial registration of a firm will be Rs 50,000. Renewal fees for companies will be one fourth of one per cent of gross premium income subject to a maximum of Rs 5 crore and a minimum of Rs 50,000. It also wants the IRA to set limits on how much insurance companies can show as expenses on new businesses, otherwise it is feared they will pass this on to agents as extra `commission?. To allay LIC and GIC fears that the new entrants will piggy back on their network, it also wants it stipulated that an agent can work for only one insurance company.