EGoM submits suggestions on insurance reforms

The Empowered Group of Ministers (EGoM) headed by External Affairs Minister Pranab Mukherjee today finalised its recommendations on insurance sector reforms, including a move to raise the foreign investment cap in the sector to 49 per cent, from 26 per cent at present.

The recommendations, which were finalised at a meeting today, have been sent to Prime Minister Manmohan Singh, sources said.

The comprehensive amendment to insurance laws is likely to be taken up shortly by the Union Cabinet for approval, after which it will be tabled in Parliament in the next session scheduled to begin on October 17.

After the Bill is introduced, it is likely to be referred to the Parliamentary Standing Committee on Finance for examination. Thereafter, the Bill will be taken up for passage.

As the coming session is likely to be the last sitting of the current Parliament, it remains to be seen whether the Bill will be passed or not.

Besides raising foreign investment limit, other amendments are aimed at allowing Indian promoters to continue to hold majority stake in insurance companies and allowing public sector general insurance companies to raise capital through sale of shares.

Amendments will be carried in the Insurance Act, 1938, LIC Act, 1956, IRDA Act, 1999, and General Insurance Business (Nationalisation) Act, 1972.