New Delhi, March 18
The Rajya Sabha passed the Insurance (Amendment) Bill ,2021, amid walkout by some members of the opposition.
The Bill aims at increasing the limit of Foreign Direct Investment in insurance to 74 per cent. Finance Minister Nirmala Sitharaman had announced the central government’s decision to open up the insurance sector further for FDI in February’s budget.
The current limit in life and general insurance is 49 per cent, with ownership and management control with Indians.
Tabling the proposed law in Rajya Sabha on Thursday, Finance Minister Nirmala Sitharaman said India received FDI worth Rs 26,000 crore in the insurance sector after 2015 when the foreign investment limit was raised to 49 per cent from 24 per cent.
Replying to a debate on the Insurance (Amendment) Bill, 2021, Sitharaman said insurance companies are facing liquidity pressure and that is why the government was proposing to increase the FDI limit further.
She said the foreign direct investment (FDI) is aimed at supplementing the domestic long term capital.
Sitharaman said hike in foreign investment limit to 74 per cent will help meet the growing capital requirement of insurance companies.
The minister stressed that the bill to hike FDI limit in insurance has been brought after extensive consultations by sector regulator IRDAI.
