Insurance Bill may be taken up in current session: FinMin

Keen to raise the foreign investment limit to 49% in the insurance sector, the Finance Ministry has said that it will try to push the Bill to amend laws on this in the current session itself.

"Insurance Bill is already in Parliament. We will try if it can be pushed in this session or may be next session," Department of Financial Services Secretary G S Sandhu said.

Finance Minister Arun Jaitley in the Budget speech said that "it is also proposed to take up the pending Insurance Laws (Amendment) Bill for consideration of the Parliament.

"The insurance sector is investment starved. Several segments of insurance sector need expansion. The composite cap of the insurance sector is proposed to be increased to 49% from the current level of 26% with full management and control through the FIPB route".

The move would help insurance firms to get the much needed capital from overseas partners.

The proposal to raise FDI cap has been pending since 2008 when the previous UPA government came up with Insurance Laws (Amendment) Bill to hike foreign holding in insurance joint ventures to 49% from the existing 26%.

The ruling BJP had earlier opposed raising the FDI cap in the insurance sector from 26% to 49%.

The Standing Committee on Finance headed by BJP leader Yashwant Sinha had earlier rejected the proposal to hike FDI in the insurance sector, saying it may not have the desired effect and could expose the economy to global vulnerability.

The insurance sector was opened up to the private sector in 2000 after the enactment of the Insurance Regulatory and Development Authority Act, 1999.

Since its opening up in 2000, the number of participants in the insurance industry has gone up from seven insurers -- Life Insurance Corporation of India (LIC), four public-sector general insurers, one specialised insurer, and the General Insurance Corporation (GIC) as the national re-insurer -- to 53 insurers as on March 31 2014 operating in the life, non-life, and re-insurance segments.

Barring the public sector insurance companies, all other insurance companies would benefit from higher FDI cap.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Tax collections are a more reliable indicator of economic growth

    Direct taxes collection figures are supposed to reflect the health of corporate bottomlines as well as the state of the overall economy.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Arun Nigavekar

Learning the art of learning styles

Recently, I met a group of new teachers from different ...

Rajgopal Nidamboor

The essence of creative energy

Creativity or originality isn’t the privilege of working minds, even ...

Gautam Gupta

Indian designers can learn a lot from Benetton

I was reading an article in the magazine about Benetton ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture