Insurance reforms: Indians not required, and other tweaks to lure foreign money

livemint.com:

Mint. These reforms are being considered with the prime aim of bringing more foreign capital to the sector as only a few investors have taken advantage of the government’s decision in 2021 to increase the foreign direct investment limit in insurance companies from 49% to 74%. Earlier this year, Switzerland-based Zurich Insurance Group Ltd announcing plans to acquire a 70% stake in Kotak Mahindra General Insurance Co.

Ltd for about ₹5,500 crore. In most other private insurance companies in India, the level of FDI is still close to or lower than 49%. The finance ministry’s department of financial services will shortly initiate consultations on new FDI regulations for the insurance sector, said one of the officials mentioned above.

“The FDI policy already has been liberalised for the insurance and other regulated financial services sectors, with investment allowed up to 100% under the automatic rule," said the second official. “There is no point now to have such restrictive operational conditions for foreign investors, and therefore a review of the rules is being undertaken by the government." Under the existing policy, foreign direct investment of up to 74% is allowed in insurance companies under the automatic route that doesn’t require any government or regulatory approval. Up to 100% FDI is permitted in insurance intermediaries such as insurance brokers, reinsurance brokers, and insurance consultants.