New Delhi: Finance Minister Nirmala Sitharaman has proposed to increase the current Foreign Direct Investment (FDI) limit for the insurance intermediaries from the current 49% to 100%.
Insurance intermediaries include insurance brokers, insurance repositories, third-party administrators as well as web aggregators like Policybazaar. Several foreign companies like Marsh and JLT are present in the insurance broking space.
Presenting her maiden budget, Sitharaman said the government was also looking into the possibility of hiking the FDI limit in the insurance companies. However, she did not indicate the new cap that the government was considering. Nevertheless, there were indications that the Narendra Modi-led government had been in favour of a 74 percent FDI cap for insurance companies.
The Insurance Act (Amendment) Act 2015 increased the FDI cap in the insurance sector to 49 per cent from 26 per cent amid stiff protests from opposition parties who raised concerns about foreign entities controlling the Indian insurance sector.
The government has been considering 100 per cent FDI in insurance intermediaries for the past two years. The Insurance Regulatory and Development Authority was also in favour of 100 per cent FDI for insurance intermediaries.
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