ALSO READMinistries, regulators sufficient to decide FDI proposals' fate: Sitharaman No foreign airlines applied to start domestic passenger flight through FDI Govt mulls relaxing FDI norms in several sectors FDI up 27% at $27.82 billion in Apr-Oct this financial year Govt seeks to move fast on easing FDI policy for multi-brand retail
The FDI policy, at present, allows 49 per cent foreign investment in the insurance sector that encompasses insurance broking, insurance companies, third party administrators, surveyors and loss assessors as defined by the Department of Industrial Policy and Promotion.
An official said that representations have been made to the government that insurance brokers should be treated at par with other financial services intermediaries, where 100 per cent FDI is permitted.
"Insurance broking is like any other financial or commodity broking services. The issue was recently discussed in an inter-ministerial meeting. The government is positively looking at the matter," the official said.
Further, industry experts stated that the insurance sector is being impacted due to weak distribution networks.
There is a need to strengthen the distribution network to support the sector as a whole.
According to Prudent Insurance Brokers Director Pavanjit Singh Dhingra, the decision would help strengthen distribution as it is not high capital intensive business.
Insurance penetration in the country was 3.4 per cent in 2015 against the world average of 6.2 per cent. It was 3.3 per cent in the country in 2014.