About Me

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Trichy, Tamil Nadu, India
Working as an Assistant in LIC of India, Rockfort BO, Trichy, TN. Having a strong belief that LIC's welfare is our welfare and always trying to work towards that. Also functioning as an office bearer of AIIEA Thanjavur Division.

Wednesday, July 17, 2013

How much FDI allowed now in Insurance?

Several news items today say that FDI in insurance sector had been hiked to 49% (from 26%). Is it true? Can Pvt. Insurance Cos. have 49% FDI now?
What happened actually?

Arvind Mayaram Committee was set up in March 2013 to recommend on the country’s foreign direct investment (FDI) policy.

The Arvind Mayaram committee suggested that FDI be capped at 49 per cent in nine sectors. These are FM radio, uplinking news & current affairs, print media (news & current affairs), commodity exchanges, stock exchanges, petroleum & natural gas refining, insurance, defence production and private security agencies.

The committee also suggested that clearance for the foreign investment proposals  (except for defence production and private security agencies) be through the automatic route, without referring the proposals to Foreign Investment Promotion Board.  However, the clearances from the concerned regulators and ministries will be necessary.

The cabinet approved these recommendations in a meeting today.

As can be seen from the recommendations, the committee has also proposed increasing the FDI cap for the insurance sector - from the current 26 per cent to 49 per cent.  
But that will require amendment to the IRDA Act which is pending before the Parliament.

So, no Insurance Co. can now have more than 26% FDI.
How many legs does this elephant have?
How much FDI allowed in Insurance?

But, when the parliament meets in the monsoon session from 5th August 2013, the government may try to push for the approval of the Insurance Laws (amendment) Bill.

We have to fight against it!
Be prepared!!