Amendments to the Insurance Act 1938

On 22nd March, 2021, the Lok Sabha passed the Insurance (Amendment) Bill, 2021 which seeks to amend the Insurance Act, 1938.

Objective

  • To increase the maximum foreign investment allowed in an Indian insurance company.

Background

  • Foreign investment in the insurance sector was first permitted in the year 2000 up to 26%.
  • Subsequently, vide an Amendment Act of 2015, this limit was raised to 49% of the paid-up equity capital of such company, which is Indian owned and controlled.
  • In budget 2021- 2022, government had proposed increasing the permissible FDI limit in insurance companies to 74% and allowing foreign ownership and control ....
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