The government is reviewing and simplifying rules to increase the foreign direct investment (FDI) limit in the insurance sector to 100% from the current 74%, the secretary of Department of Financial Services, M Nagaraju, said in a press briefing on Monday. He added that the draft insurance bill will be sent to the Cabinet “shortly”.CompanyValueChange%ChangeThe Draft Insurance Bill is a proposed set of amendments to the Insurance Act of 1938, the Life Insurance Corporation Act of 1956, and the Insurance Regulatory and Development Authority Act of 1999. The bill aims to make insurance more accessible to all Indians by 2047, while also increasing the FDI limit for Indian insurance companies from 74% to 100%.”We have just received approximately ₹83,000cr of FDI in insurance since opening up the sector,” said Nagaraju, adding that regulatory restrictions have limited further inflows.
The country has a large number of insurance players, but investment remains below expectations, the DFS Secretary stated, adding that the government will review rules on dividend repatriation and key personnel appointments to attract more capital.
India lags behind global averages in insurance penetration and density, and regulatory reforms could help boost participation, he said.Nagaraju also said that India will amend the LIC Act and IRDA Act to provide more autonomy to the state-run insurer and facilitate regulatory changes.The government is making multiple amendments to enable composite licensing and improve ease of doing business in the insurance sector, Nagaraju said, adding that the changes will cover approvals for opening offices, staff compensation, and recruitment.“India lags behind global averages in insurance. We want to give more functional autonomy to LIC through amendments to the LIC Act while also reforming the IRDA Act,” he said.All three Acts will be amended together as part of broader regulatory reforms, he added.Also Read: Key changes ULIP investors can expect from the new tax rulesFirst Published: Feb 3, 2025 2:07 PM IST
