Govt notifies solvency rules for foreign-owned insurance companies

Rules mandate 50% profit in general reserve if solvency margin is not maintained after profit repatriation, half the board should consist of independent directors

The finance ministry has notified the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2021 that require insurers with foreign ownership of over 49 per cent to maintain a solvency margin of 180 per cent if they declare dividend payments in a financial year.

The government had sought public comments on draft rules issued on April 15, and has now notified the rules further to amend the Indian Insurance Companies (Foreign Investment) Rules, 2015.

According to the rules notified, if insurance companies with foreign ownership above 51 per cent repatriate profits in the form of dividend to their shareholders, but cannot meet the