New Delhi (NVI): The Lok Sabha today cleared the Insurance (Amendment) Bill 2021, which will increase the limit of Foreign Direct Investment (FDI) in the insurance sector from 49 per cent to 74 per cent.
The Insurance (Amendment) Bill has already been passed by the Rajya Sabha on March 18.
Speaking about the Bill in Lok Sabha, Finance Minister Nirmala Sitharaman said that raising the FDI limit in the insurance sector will help insurers to raise additional funds and tide over financial problems.
She added that the Centre will provide funds to the public sector insurance companies but the private players will have to raise capital on their own.
Sitharaman also informed the FDI limit was being raised on the recommendations of the regulator Insurance Regulatory and Development Authority of India (IRDAI) which had extensive consultations with stakeholders.
She further said the FDI inflow in the insurance sector had increased significantly after the government of India decided to raise the cap from 26 percent to 49 percent earlier in 2015.
“As much as Rs 26,000 crore has come as FDI in the insurance sector since 2015,” the Finance Minister said, adding the asset under management (AUM) in this sector has grown by 76 percent during the last five years.