Competition must be introduced in both life and general insurance, he said while addressing the Federation of Indian Chambers of Commerce and Industry (Ficci) organised seminar on insurance. However, Kumar stopped short of elaborating on the nature of competition that should be introduced in the insurance sector. The BJP is against the entry to foreign insurance companies as it feels that foreign firms cannot introduce new technology in this industry.

The BJP has advocated that the industry should be liberalised first for domestic companies. In keeping with the BJP's stance Kumar did not elaborate on the nature of the liberalisation that will be introduced. However, Kumar said that liberalisation in insurance will introduce efficiency in the public sector andmake it more service oriented. In addition it will enable long-term funds to come into the country which are critically needed for building infrastructure. Making a strong case for the entry of foreign companies into insurance, N Rangachary, chairman, interim Insurance Regualtory Authority said more players in the market will be good for consumers. "It will help the public sector companies to shed fat and change their attitude,"' he remarked. It was in 1956 that the then finance minister CD Deshmukh had advocated the nationalisation of the insurance sector to protect the interest of policy holders.