"Now we have to look afresh on this (insurance sector) ...Whether there could be some other instrument (to permit private companies to raise funds) without raising (FDI cap) to 49 per cent. All these issues we have to address and then come back to the government," Financial Services Secretary G S Sandhu said.
He spoke to reporters after making a presentation to Finance Minister Arun Jaitley on issues related to the banking and insurance sector.
Sandhu said one option could be to raise the FDI limit in various insurance segments in a phased manner.
"We will see whether we need to take up this whole hog in all categories of insurance or we can start in some particular categories first. We have to examine that. Then we have to talk to major players and see what could be other options apart from this," Sandhu said.
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The Standing Committee on Finance had earlier rejected the proposal, 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.