Insurance Amendment Bill to be introduced by Finance Minister during monsoon season #IndiaFinance

The Insurance Amendment Bill, which seeks to allow 100% foreign direct investment (FDI) in the insurance sector, is likely to be introduced in Parliament during the upcoming monsoon session, according to sources and news sites from India.

The draft of the bill has been finalised and is expected to be presented to the Cabinet for approval shortly.

Once cleared by the Cabinet, the Department of Financial Services under the Ministry of Finance will initiate the process to bring the Bill before Parliament, sources said.

The ministry is aiming to table the legislation during the monsoon session, which typically begins in July.

As part of broader financial sector reforms, Finance Minister Nirmala Sitharaman had announced in this year’s Budget the proposal to raise the foreign investment ceiling in insurance companies from the current 74% to 100%.

The finance ministry has proposed a series of amendments to the Insurance Act, 1938, including raising the foreign direct investment (FDI) limit in the insurance sector to 100%, lowering paid-up capital requirements, and introducing provisions for a composite licence.

The Bill also seeks to allow insurance agents to sell products from multiple insurers, moving away from the current exclusivity model.

As part of a broader legislative overhaul, amendments will also be made to the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999, alongside changes to the Insurance Act, 1938.

Currently, there are 25 life insurance companies and 34 non-life or general insurance firms in India.