The reason why Indian insurance companies don't advertise D&O, apparently, is because evaluating the risk potential and hence the premium for executives is very tough, and they obviously want to be very choosy about whom they sell this insurance to. One chief executive, whose position is fraught with danger, and who is badly in need of such insurance is, of course, Atal Behari Vajpayee, increasingly coming under flak over hisgovernment's move to allow foreign equity in the insurance sector.

More so, since the totally uncalled for attacks are coming primarily from his own party, his family in the Sangh Parivar and its affiliates such as the Swadeshi Jagaran Manch.

One such attack, for instance, has come from none other than RSS stalwart Dattopant Thengdi who has deemed the move to allow foreign equity in the sector as "anti-national and anti-poor". Wha-tever Thengdi's view on whether the sector should be reserved only for wholly Indian-owned companies, it's difficult to understand what he means by anti-poor. The only way that allowing foreign firms to take a 26 per cent stake can be described as anti-poor is if this company offers insurance at a rate higher than that offered by fully-Indian owned firms, and if consumers are forced to buy their products.

Now surely Thengdi doesn't think this is going to happen? After all, several private banks, some of which are foreign, are operating in the country, and their services aremore expensive than those of public sector Indian banks. But this is not considered anti-poor. The reason is simple: those customers who want a particular level and type of service go to the foreign banks, while others go to their public sector ones. It's just a matter of market segmentation, and that's precisely what will happen in the insurance market once foreign equity is allowed.

A point which Thengdi may also like to consider is that while it sounds very good to say that the insurance sector should be opened up only to wholly-Indian owned companies (or those with some NRI presence), which are the companies he thinks will enter the sector? The fact is that no Indian company has any experience in the sector. So how is it to compete with the public sector insurance companies, to be able to come up with innovative insurance schemes and to develop methods to evaluate and mitigate risk? Obviously, it needs some help from someone who knows the business. And that, whether the RSS likes it or not, is foreigninsurance companies.

Some in the RSS might argue that foreign company experience can be bought by Indian companies, they don't need to be given an equity share. That, however, is not practical for the simple reason that the insurance business is not just about buying equipment from a foreigner. It's not as simple as, say, buying a power generator or a turbine from General Electric and then running it yourself. Nor is it possible for Indian companies to buy some model of risk evaluation from, say, a foreign insurance firm, and then keep using it, and possibly refining it. Since risk factors differ from place to place, it isn't possible to do this. What you need is some hands-on experience of running an insurance business.

A close, and immediate, parallel is that of the telecom sector. When it was opened up to the private sector a few years ago, each one of the Indian companies who bid for the franchises had a foreign collaborator from the telecom sector. And it's not just because the Indian companies feltthat they needed them to help set up and run the networks. This was one of the tender requirements! That's right, when the telecom ministry opened up the sector, they insisted, since no Indian company had ever run a telecom network, that each of them have a foreign telecom collaborator, whose experience would be taken into account before awarding any licence.

And while the telecom ministry insisted only on foreign equity of 10 per cent, most firms went in for a much higher foreign equity. Initially, they didn't have the kind of money that was needed to set up a telecom network. Later, when they found that they had over-estimated the market, they didn't have the funds to sustain such losses and sought to sell their equity to their richer foreign counterparts.

It is issues such as these, and not lack of patriotism, that went into Vajpayee's decision to propose a 26 per cent stake for foreign firms in the insurance sector. The RSS and other camp followers unfortunately don't seem to realise this, caught upas they are with issues such as the moral and spiritual re-armament of the country. Right now, given the manner in which the RSS and its affiliates are attacking the Prime Minister and even talking of how he needs to be pulled down (decade-old pictures of him and alleged Dawood aide Romesh Sharma at a public function are being circulated), it's not just Vajpayee but the entire country which needs insurance, foreign or otherwise.