Insurance Amendment Bill proposing 100 per cent FDI unlikely in winter session

PTI New Delhi: Insurance Amendment Bill, which proposes 100 per cent FDI in the insurance sector, may not be introduced in Parliament in the ongoing session, sources said. Some finetuning may be required in the draft Bill after receiving comments from stakeholders, sources said. Given the paucity of time, it is difficult to present the Bill in the ongoing session, sources said, adding it may, however, come in the Budget session. The finance ministry has proposed to amend various provisions of the Insurance Act, of 1938, including raising foreign direct investment (FDI) in the insurance sector to 100 per cent, reduction in paidup capital, and provision for composite licence.

The Department of Financial Services (DFS) has sought public comments on the proposed amendments by December 10. As per the proposal, the FDI limit in Indian insurance companies will be raised from 74 per cent to 100 per cent. This is the second public consultation that the DFS has sought on the proposed amendments to the Insurance Act 1938, the Life Insurance Corporation Act 1956, and the Insurance Regulatory and Development Authority Act, 1999. The finance ministry in December 2022 invited comments on the proposed amendments to the Insurance Act, 1938, and the Insurance Regulatory Development Act, 1999. According to a recent office memorandum, it is proposed to amend certain provisions of insurance laws to ensure accessibility and affordability of insurance to citizens, foster expansion and development of the insurance industry, and streamline business processes. In this regard, a comprehensive review of the legislative framework governing the sector has been done in consultation with the Insurance Regulatory and Development Authority of India (IRDAI) and the industry, it said. The proposed amendments primarily focus on promoting policyholders' interests, hancing their financial security, and facilitating the entry of more players into the insurance market.