Indian promoters may lose control of insurance companies, says report

Updated : January 31, 2020 12:49 PM IST

This development comes as the government is mulling to enhance the foreign direct investment (FDI) limit in the industry to 74 percent from 49 percent, the report said.

In March 2015, the government raised the FDI ceiling in insurance to 49 percent from 26 percent.

The government is likely to drop the clause that mandates control of insurance companies by Indian promoters, reported Economic Times.

"The government will amend the relevant provision while dropping the control and ownership clause of the Insurance Act through the Finance Bill," an Insurance Regulatory and Development Authority of India (Irdai) official was quoted as saying in the newspaper report.

"It has decided to prepare a cabinet note proposing higher FDI," he added.

This development comes as the government is mulling to enhance the foreign direct investment (FDI) limit in the industry to 74 percent from 49 percent, the report added.

The FDI hike is being examined very carefully, the source was quoted as saying in the report. Regulations on royalties, dividends, ring-fencing of balance sheets may also be reviewed.

In March 2015, the government raised the FDI ceiling in insurance to 49 percent from 26 percent, promoting foreign promoters to increase their stakes in joint ventures. Before this amendment, the Insurance Act didn't require any domestic ownership and control.

Indian promoters may lose control of insurance companies, says report

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