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IRDAI in favour of 100% FDI for entire insurance intermediary sector

Press Trust of India  |  New Delhi 

The Regulatory and Development Authority of (IRDAI) is in the favour of allowing 100 per cent foreign direct investment in intermediaries in addition to brokers, according to sources.

The regulator is of the view that if can be allowed then the other like aggregator and third party administrators (TPA) may be considered for the same relaxation, the sources said.

In its response to the ministry with respect to increase in FDI limit in the firm from the current level of 49 per cent, the IRDAI said all major international such as Marsh, JLT, Willis and are already present in the country as the capital required for undertaking such activity is very less.

The increase in foreign direct investment (FDI) limit to 100 per cent will not result in significant inflow of foreign capital. According to estimates, the total capital infusion by three brokers after increasing the FDI limit is a mere Rs 4.78 crore.

The government is considering proposal to allow 100 per cent FDI in and has set up a committee comprising secretaries of department of economic affairs, department of and department of industrial policy and promotion (DIPP).

The IRDAI has also argued that there is no dearth of capital and Indian investors are also looking at avenues to invest.

FDI in is restricted to 49 per cent. However, the government allows 100 per cent foreign investment for other financial intermediaries.

Industry experts are of the opinion that the is being impacted due to weak distribution networks.

According to the Economic Survey, life was 2.72 per cent and general was 0.77 per cent. Insurance penetration, which is the ratio of premium underwritten in a given year to the (GDP), in increased to 3.49 per cent in 2016-17 from 2.71 per cent in 2001.

The measure of and density reflects the level of development of the in a country. While insurance penetration is measured as the percentage of to GDP, is calculated as the ratio of premium to population (per capita premium).

The rose to USD 59.7 in 2016 as against USD 54.7 in 2015 while insurance penetration remained unchanged at 2.72 per cent 2016, as per the latest Insurance and Regulatory and Development Authority of data.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, October 10 2018. 20:10 IST