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Parliament passes Insurance bill 2021
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The parliament has passed the Insurance ( Amendment ) Bill 2021, with the Lok Sabha approving it on 22 March 2021.
This insurance bill is introduced in Lok Sabha by the Minister of Corporate Affairs, Ms. Nirmala Sitharaman, on March 15 , 2021
It seeks to amend the Insurance Act, 1938 which will increase the limit of foreign investment allowed in the Indian insurance companies.
Key Highlights of Insurance Bill
- The bill provides to increase of FDI limit from existing 49% to 74% .
- It also removes restrictions on ownership and control of Insurance Companies.
- The Bill seeks to increase the maximum foreign investment allowed in an Indian Insurance Company.
- The Act allows foreign investors to hold up to 49% of the capital in an Indian Insurance Company, which must be owned and controlled by Indian entity.
- The Act provides the framework for the functioning of insurance business and regulate the relationship between an insurer, it’s policy holders, it’s shareholders and the regulators.
- According to Finance Minister insurance sector requires a huge and long term investment as it is a capital intensive sector.
- Insurance Companies are facing liquidity pressure and the higher limit would help meet the growing capital requirement.
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