Scattered and decentralised land records have emerged as the most contentious hurdle in providing insurance for land titles, prompting the insurance watchdog, the IRDA to study the issue before approving products providing title cover.

According to the Business Standard, government-run insurance companies have been mooting the product to the regulator over the last two years. However, IRDA  has turned down their proposals, in spite of rising demand for cover against loss of interests in a property due to title defects. Reinsurers have also expressed reservations about  taking on the risk of insuring property titles in India.

"IRDA has not yet given clearance for title insurance in India. We are pursuing them for approval. In India, land deeds are not computerised and are handled at a decentralised basis. The regulator basically wants to know how claims will settled in such a situation, among other things," says Mr G Srinivasan, Chairman and Managing Director of state-owned United India Insurance.

"Title insurance would have good takers, not only at the corporate, but also at individual, levels. In future, we will definitely look into the product. We had thought of having this product about two years before, but reinsurers were not comfortable with the product. Also, the states need to computerise their land records before title insurance is launched in India," says New India Assurance's Chairman and Managing Director, Mr M Ramadoss.