The Rajya Sabha has passed the Insurance (Amendment) Bill, 2021. It seeks to amend the Insurance Act, 1938 which will increase the limit of foreign investment allowed in Indian insurance companies.
The Bill provides to increase the foreign direct investment limit from existing 49 percent to 74 percent. It also has a provision for removal of restrictions on ownership and control of the insurance companies.
Replying to a discussion yesterday, Finance Minister, Nirmala Sitharaman said, that a higher FDI limit of 74 per cent is not a compulsion for every insurance company, as it sets only an upper limit. She clarified that increasing the limit does not mean automatic foreign investment to that level to all companies, and each and every company will decide the limit of investment.
Responding to members’ questions with regard to reservation policy, the minister assured the House that the Government is fully committed to social justice and existing reservation policy will continue in the insurance sector.