India's union Finance Minister P Chidambaram has announced plans to revive the insurance industry in the country with a host of measures.

The measures include relaxation of investment norms allowing insurance companies. Under the current rules, the insurance companies are required to hold 75 per cent of their debt market investments in AAA rated instruments, which do not include government securities.

The finance minister indicated that the insurance sector regulator, Insurance Regulatory Development Authority (Irda) will consider relaxing the norms and include government securities and other investments as acceptable investment options. The move will release a space of 12.5 per cent for investments on options other than AAA rated debt instruments, according to FM.

The FM is also planning to implement faster product clearances and tax incentives to expand the insurance cover of the population in the country and bring recovery in the industry. The insurance cover in the country stands at just above 5 per cent.

The government is planning to issue guidelines making 30-day norm for clearance of products mandatory. A new system will also be announced to allow firms to launch established standard products without needing approval if the product meets requirements.