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Govt mulls 100% FDI in insurance broking; insurers' cap to stay at 49%

Industry experts have stated that the insurance sector is being impacted due to weak distribution networks

Press Trust of India  |  New Delhi 

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The government is mulling permitting 100 per cent (FDI) in to give a boost to the sector, sources said.

The policy, at present, allows 49 per cent foreign investment in the that encompasses insurance broking, insurance companies, third party administrators, surveyors and loss assessors as defined by the Department of Industrial Policy and Promotion (DIPP).

The DIPP is an arm of the commerce and industry ministry which deals with related matters and promoting ease of doing business in the country.

Representations have been made to the government time and again on the issue that insurance brokers should be treated at par with other financial services intermediaries, where 100 per cent is permitted.

"is like any other financial or commodity broking services. The issue was recently discussed in a high level inter-ministerial meeting. The government is positively looking at the matter," sources said.

The official, however, clarified that the FDI cap for would remain at 49 per cent.

The has recently held meeting on the subject and the Prime Minister's Office too has sought views of the DIPP on the matter.

Industry experts have stated that the is being impacted due to weak distribution networks.

There is a need to strengthen the distribution network to support the sector as a whole.

Insurance penetration in the country was 3.4 per cent in 2015 against the world average of 6.2 per cent.

First Published: Tue, October 02 2018. 16:00 IST