The list of players eager to enter the field includes Reliance, the Tatas, DCM, Kotak Mahindra, HDFC, State Bank of India, ICICI, Unit Trust Of India, Hindustan Times, Bombay Dyeing, Twentieth Century Finance, Cholamandalam Finance, Ranbaxy and Dabur. They are opting for either life or general insurance business depending on the synergy they can create with their existing business.

However, most of them will have to rework on their plans as Yashwant Sinha has opened the sector to only "private Indian companies". A host of corporates have already tied up with foreign partners to enter the sector.

While the SBI wasexploring the possibility of forging an alliance with the NatWest group, other foreign entities which have already tied up with Indian companies are Eagle Star, Standard Life, Royal Insurance, Rothschild, Guardian Royal, among others.

"We will look into the possibility of entering the insurance sector," UTI chief GP Gupta said.

HDFC chairman Deepak Parekh said: "We don't know as yet what the finance minister meant by saying the insurance sector will be opened to only Indian companies. He doesn't categorically rule out a foreign company from taking a small stake in the Indian companies allowed into the insurance sector. I am confident that foreign companies will be allowed to take a 20-26 per cent stake in the Indian company.''

Speaking to The Financial Express, Godrej & Boyce managing director Jamshyd Godrej said that though the step to allow the private sector by Sinha is welcome, the centre should have extended it to foriegn players as well. "I feel the private companies can still go for atechnical tie-up with the foreign partners to undertake the business," he said.

Meanwhile, the state-run insurance industry is lobbying that the Insurance Regulatory Authority (IRA) should ensure that mega corporates should not be allowed to enter the market. "The licensing norms for new banks do not allow mega corporates like the Tatas and Birlas to set up banks. Similarly, the IRA should deny mega corporates entry into the insurance sector," a GIC source said. ``By themselves these corporates constitute the large industrial insurance clients. If they are allowed to enter the sector, it would give rise to unhealthy practices in the market,'' sources said.

LIC chairman G Krishnamurthy said allowing private players in the life insurance business will encourage the institution to provide the finest quality of services. ``I don't think competition can affect the institution's growth,'' Krishnamurthy said, adding LIC with over Rs 1,10,000 crore worth of funds is too big for other private-sectorcompanies.

Another public-sector monolith, General Insurance Corporation, has also welcomed the challenge. ``I welcome the announcement,'' said New India Assurance chief D Sengupta. Though restructuring is necessary to provide better services, the companies are ready to take on the competition, he said.

The state-run industry is set to kick off massive a restructuring plan to protect the turf. GIC is likely to postpone its proposed managed-healthcare product as the institution wants to take a comprehensive view of the emerging situation.

Meanwhile, the foreign players remain unfazed. "It is definitely an encouraging step,'' said John Brice, India representative, General Accident of the UK. "I do not know as yet the exact definition of the Indian company as announced by the finance minister," he said.

According to Jon H Chambreau, chief executive, American Insurance Company India, the largest insurance company in the US, the company will wait for some time before reacting. ``The finance minister hassaid that he will bring legislation to give statutory status to the IRA, for which we will wait to know the implication of the present announcement,'' he said.

Vijaya Thakur, general secretary, New India Assurance Officers' Association, said that the new announcement is a step in the right direction.