Cabinet clears bill to increase FDI in insurance sector by 49 percent

The Cabinet has approved the official amendments to the Insurance Laws (Amendment) Bill, 2008 and to its introduction in the Rajya Sabha.

A decision in this regard was taken by it at a meeting chaired by Prime Minister Narendra Modi in New Delhi yesterday.

The bill is aimed at removing archaic and redundant provisions in the relevant legislations and to enable the insurance sector to work for the betterment of the insured.

Earlier, the Select Committee on the Insurance Laws (Amendment) Bill had recommended a composite cap of 49 per cent on foreign investment in insurance. This will include all forms of FDI and foreign portfolio investments.

At present, the foreign direct investment limit in the sector is 26 per cent.

The report tabled by committee chairman Chandan Mitra in the Rajya Sabha yesterday endorsed the government bill to amend the Insurance Act.

The Rajya Sabha had appointed a 15-member select committee, in August this year, to scrutinize the Insurance Laws (Amendment) Bill, 2008, which had been held up for nearly six years on account of political differences.

The government is likely to bring the Bill for consideration in the Rajya Sabha next week.