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Insurance Regulatory and Development Authority (Irda) has set up a ten-member committee to look into having 100% Foreign Direct Investment (FDI) in insurance intermediaries and Third Party Administrators (TPAs).
The Insurance Act, 1938 does not stipulate any FDI limits for insurance intermediaries, but Irda had restricted it to 26%.
The regulator said that the Authority has received references from various stakeholders requesting them to consider the foreign holding in insurance brokers from existing 26% to 100%.
This committee will look into the case for increasing FDI limit for these entities, the extent to which it is to be permitted, implication of this on industry and study international practices in this regard.
Headed by Suresh Mathur, senior joint director of Irda and having representatives from life and non-life companies, broking firms, Irda officials and industry bodies, this committee will submit its report in three months.
Irda has also recently gazetted the Insurance Brokers Regulations which have said that broker's licenses would have to be renewed every three years. It said that not more than 50% of the premium should be from any one client in a financial year.
Further, not more than 25% of the insurance handled by the insurance broker in any financial year shall be placed with the insurance company within the promoter group separately for life and for general insurance business. Co-broking which means more than one broker handling a client, has also been allowed.
