Cabinet approves amendment to Insurance Act, paving way for 74% FDI limit

The increase of the FDI limit will provide insurance companies with committed funds to improve the penetration of insurance in the country, says an industry executive

The Union cabinet has approved changes to the Insurance Act for increasing the foreign direct investment (FDI) limit to 74 per cent from the present 49 per cent. 

With the cabinet’s nod, the changes will be introduced in Parliament for approval. Once the Parliament approves the changes, the process to bring an applicable framework would start, an official said.

In her Budget speech for 2021-22, Finance Minister Nirmala Sitharaman had proposed the increase to allow foreign ownership and control with safeguards. 

“Under the new structure, the majority of Directors on the Board and key management persons would be resident Indians,