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India is planning to increase the foreign direct investment (FDI) cap in the insurance sector from 74% to 100%, sources have told CNBC-TV18. The proposal is part of a broader set of reforms aimed at attracting global investors and modernising the insurance industry.
The amendments may also introduce composite licenses for insurers, enabling companies to operate across life, general, and health insurance segments under a single license, sources said.
Insurance agents might also be allowed to sell policies from multiple insurers.
Sources said these changes are likely to be tabled as part of the Insurance Amendment Bill in the ongoing winter session of Parliament.
It must be noted that the Insurance Regulatory and Development Authority of India (IRDAI) has already submitted its presentation supporting 100% FDI to the government.
IRDAI Chairman Debasish Panda has emphasised the need for higher foreign capital, stating that the insurance sector is capital-intensive and poised for significant growth.
“Depending solely on domestic capital could lead to a crowding-out effect. Allowing 100% FDI will bring in global expertise, capacity, and technology,” Panda said.
He added that this move would enable foreign players to plan their business in India independently, decide on their growth strategies, and infuse capital promptly without needing to rely on an Indian partner.
Currently, the FDI cap for insurance companies stands at 74%, following an increase from 49% in 2021.
The amendments may also introduce composite licenses for insurers, enabling companies to operate across life, general, and health insurance segments under a single license, sources said.
Insurance agents might also be allowed to sell policies from multiple insurers.
Sources said these changes are likely to be tabled as part of the Insurance Amendment Bill in the ongoing winter session of Parliament.
It must be noted that the Insurance Regulatory and Development Authority of India (IRDAI) has already submitted its presentation supporting 100% FDI to the government.
IRDAI Chairman Debasish Panda has emphasised the need for higher foreign capital, stating that the insurance sector is capital-intensive and poised for significant growth.
“Depending solely on domestic capital could lead to a crowding-out effect. Allowing 100% FDI will bring in global expertise, capacity, and technology,” Panda said.
He added that this move would enable foreign players to plan their business in India independently, decide on their growth strategies, and infuse capital promptly without needing to rely on an Indian partner.
Currently, the FDI cap for insurance companies stands at 74%, following an increase from 49% in 2021.
First Published: Nov 26, 2024 11:42 AM IST
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