HSBC is planning to exit its insurance joint venture Canara HSBC Oriental Bank of Commerce Life Insurance Company in India, a second foreign company to depart Indian insurance sector.

The JV was formed by Canara Bank, Oriental Bank of Commerce and HSBC, in which both Indian banks hold 74% stake together, while the UK based bank owns the remaining 26% stake.

The exit India mode by Global insurance firms could be partly due to the delay in lifting the cap on foreign investment in insurance ventures even after opening the sector a decade ago, reported The Economic Times.

According to an estimate, for the year 2011-12, the income of the industry from the sale of new policies surged by 9%, putting a negative impact on the earning of the underwriters.

Prior to HSBC, New York Life has exited its life insurance JV with Max India, while Fidelity sold its business to L&T.