Source: BS
Context:
Finance Minister Nirmala Sitharaman has indicated that the Insurance Amendment Bill, which proposes 100% foreign direct investment (FDI) in the sector, is likely to be introduced in the upcoming Winter Session of Parliament.
Key Proposals of the Bill:
- FDI Enhancement:
- Raise the foreign investment limit from the current 74% to 100%.
- Applicable to companies investing the entire premium in India.
- Review and simplify existing guardrails and conditionalities for foreign investment.
- Amendments Across Insurance Laws:
- Insurance Act, 1938: Principal framework for insurance operations in India.
- Life Insurance Corporation Act, 1956: Empower LIC board for operational decisions (branch expansion, recruitment).
- Insurance Regulatory and Development Authority Act, 1999: Align regulatory provisions with the amended FDI policy.
- Other Provisions:
- Reduction in paid-up capital requirements.
- Provision for a composite licence to streamline operations.
Objectives:
- Promote policyholders’ interests and financial security.
- Encourage entry of new players, increasing competition.
- Boost insurance penetration to achieve the goal of ‘Insurance for All by 2047’.
- Enhance ease of doing business and create employment opportunities.
