New Delhi: The Insurance (Amendment) Bill, 2021 was introduced in the Rajya Sabha on the 15 March, 2021 for amending the Insurance Act, 1938, in order to raise the limit of foreign investment in Indian insurance companies from the existing 49 per cent. to 74 per cent
The limit of foreign investment insurance companies is being raised to achieve the objective of Government’s Foreign Direct Investment Policy of supplementing domestic long-term capital, technology and skills for the growth of the economy and the insurance sector, and thereby enhance insurance penetration and social protection.
The Insurance Act, 1938 was enacted to consolidate and amend the law relating to business of insurance in the country. The foreign investment in insurance sector was permitted in the year 2000 by allowing the same up to 26 per cent. in an Indian insurance company. Subsequently, vide the Insurance Laws (Amendment) Act, 2015, this limit of foreign investment was raised to 49 per cent. of the paid-up equity capital of such company, which is Indian owned and controlled as per the rules made in this behalf.