Parliament: Insurance Amendment Bill to be introduced in monsoon session of Parliament, preparation to increase FDI to 100 percent
New Delhi| The Insurance Amendment Bill may be introduced in the upcoming monsoon session of Parliament. The bill is set to increase the FDI limit in the insurance sector to 100 per cent. According to media reports, the draft of the bill is ready and it will soon be presented before the Cabinet for approval. After Cabinet approval, the Department of Financial Services under the Finance Ministry will begin the process of introducing the bill in Parliament.
The proposal may come in the monsoon session of Parliament
The monsoon session of Parliament usually begins in July. Finance Minister Nirmala Sitharaman said in this year’s budget speech that under financial sector reforms, it proposed to increase the limit of foreign investment in the insurance sector from the current 74 per cent to 100 per cent. The Finance Minister had said, ‘This increased limit will be available to those companies which invest full premium in India. At the same time, the existing conditions and protections associated with foreign investment will be reviewed and simplified
These changes can be made
According to reports, the Ministry of Finance has proposed to amend various provisions of the Insurance Act, 1938, including increasing foreign direct investment (FDI) in the insurance sector to 100 per cent, and provision for overall licensing. The proposed amendment focuses on promoting the interests of policyholders, enhancing their financial security and facilitating the entry of more players into the insurance market. Which will promote economic growth and employment generation.
The Insurance Act, 1938, is the principal Act providing the legislative framework for insurance in India. It provides the framework for the functioning of insurance businesses and regulates the relationship between the insurer, its policyholders, shareholders and the regulator IRDAI. Currently, there are 25 life insurance companies and 34 non-life or general insurance firms in India. The FDI limit in the insurance sector was last raised from 49 per cent to 74 per cent in 2021. In 2015, the government had increased the FDI limit in the insurance sector from 26 percent to 49 percent.
