Revamping Insurance: New Amendments Proposed for 100% FDI and Beyond

The finance ministry aims to amend the Insurance Act, 1938, with plans to raise foreign direct investment (FDI) in the insurance sector to 100%, reduce paid-up capital, and introduce composite licenses. These changes will ensure accessibility, encourage sector growth, enhance insurance penetration, and facilitate greater economic development.

The finance ministry has unveiled proposals to amend the Insurance Act, 1938, intending to raise foreign direct investment (FDI) in the insurance sector to 100% and reduce the paid-up capital required. This move is set to expand the sector's growth and accessibility, according to an official memorandum dated November 26, 2024.

The Department of Financial Services (DFS) is inviting public feedback on these proposed amendments by December 10. This marks the second round of public consultation on modifications to the Insurance Act, Life Insurance Corporation Act, and the Insurance Regulatory and Development Authority Act.

The proposed changes aim to promote policyholders' interests, increase financial security, and enable more market players. By fostering economic growth and surging employment opportunities, these amendments are a bid to achieve 'Insurance for All by 2047'.

(With inputs from agencies.)