The government is considering allowing 100% foreign direct investment (FDI) in insurance intermediaries with a view to give a boost to the sector and attracting more funds, sources said.
Intermediary services include insurance broking, third party administrators, surveyors and loss assessors.
The FDI policy, at present, allows 49% foreign investment in the insurance sector, which includes insurance intermediaries.
Sources said that there is a need to de-link the FDI cap in insurance intermediaries from insurance companies.
Representations have been made to the government that these intermediary services should be treated at par with other financial services intermediaries, where 100% foreign investment is permitted.
Further, industry experts stated that the insurance sector 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 over 3.4% against the world average of 6.2%.
First Published: IST