New Delhi, March 15 (PTI): Finance Minister Nirmala Sitharaman on Monday introduced a Bill in Rajya Sabha that seek to amend the Insurance Act to pave the way for 74 per cent foreign direct investment (FDI) in the sector.
The Union Cabinet on Wednesday had gave its nod for amendments in the Insurance Amendment Bill 2021, Finance Minister Sitharaman introduced the Bill for amendments in the Insurance Act, 1938. Currently, the permissible FDI limit in the life and general insurance stands at 49 per cent with ownership and management control with Indian.
Sitharaman presenting the Union Budget for 2021-22 had said, "I propose to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49 per cent to 74 per cent in insurance companies and allow foreign ownership and control with safeguards."
Under the new structure, the majority of directors on the board and key management persons would be resident Indians, with at least 50 per cent of directors being independent directors, and specified percentage of profits being retained as a general reserve. It was in 2015 when the government hiked the FDI cap in the insurance sector from 26 per cent to 49 per cent.
