New Delhi: The Finance Minister has stated that the Insurance Amendment Bill, which permits 100 percent foreign direct investment (FDI) in the insurance sector, is likely to be introduced in the upcoming winter session of Parliament. The winter session of Parliament usually begins in the latter part of November and concludes before Christmas. When asked whether the bill to further liberalize FDI in the insurance sector could be presented in the upcoming winter session of Parliament, the minister said, « I hope so. »

In this year’s budget speech, the Finance Minister proposed increasing the foreign investment limit in the insurance sector from the current 74 percent to 100 percent under the next-generation financial sector reforms. The increased limit will be available to companies that invest their entire premium in India. Existing security measures and conditions related to foreign investment will be reviewed and simplified.

So far, the insurance sector has attracted ₹82,000 crore through foreign direct investment. The Ministry of Finance has proposed amendments to various provisions of the Insurance Act, 1938, including increasing foreign direct investment (FDI) in the insurance sector to 100 percent, reducing paid-up capital, and providing a composite license. Under a comprehensive legislative process, the Life Insurance Corporation Act of 1968 and the Insurance Regulatory and Development Authority Act of 1999 will be amended along with the Insurance Act of 1938.

Reforms in the Insurance Sector to Boost Investment

Proposed amendments to the LIC Act suggest granting its board the authority to make operational decisions such as branch expansion and recruitment. The proposed amendments primarily focus on promoting policyholders’ interests, enhancing their financial security, and facilitating the entry of more companies into the insurance market, which will boost economic growth and employment generation.

Such changes will help increase the efficiency of the insurance industry, improve ease of doing business, and expand insurance access to achieve the goal of insurance for all by 2047. The Insurance Act of 1938 is the primary legislation providing the regulatory framework for insurance in India. It outlines the functioning of insurance businesses and governs the relationships between insurers, policyholders, shareholders, and the regulatory authority. The entry of more companies into this sector will not only increase its reach but also create employment opportunities across the country.

Currently, India has 25 life insurance companies and 30 non-life or general insurance companies, including specialized general insurance companies such as the Agriculture Insurance Company of India Limited and ECGC Limited. The FDI limit in the insurance sector was last

Parliament

The term « Parliament » most commonly refers to the Palace of Westminster in London, the meeting place of the UK’s Houses of Parliament. The current Gothic Revival structure was largely rebuilt in the mid-19th century after a fire destroyed much of the original medieval palace. It is a UNESCO World Heritage Site and an iconic symbol of British democratic governance.

Insurance Amendment Bill

The Insurance Amendment Bill is not a physical place or cultural site, but a piece of proposed legislation. It is a bill introduced to modify existing insurance laws, typically to update regulations, enhance consumer protection, or adapt to new financial realities. Its history is defined by the parliamentary process, where it is debated and can be amended before potentially becoming law.

Insurance Act, 1938

The Insurance Act of 1938 was a landmark piece of U.S. federal legislation that established the modern framework for regulating the business of insurance. It was enacted to protect policyholders and bring stability to the industry by setting standards for insurer solvency and market conduct. This act was a direct response to widespread insolvencies during the Great Depression and significantly increased federal oversight.

Life Insurance Corporation Act of 1968

The Life Insurance Corporation Act of 1968 is not a physical place or cultural site, but a piece of Indian legislation. This act led to the nationalization of the life insurance industry in India and established the Life Insurance Corporation (LIC) as a state-owned entity. It was a landmark event in India’s economic history, consolidating over 240 private insurers into a single public corporation.

Insurance Regulatory and Development Authority Act of 1999

The Insurance Regulatory and Development Authority Act of 1999 is an Indian parliamentary act that established the Insurance Regulatory and Development Authority (IRDA) as the national statutory body for regulating and promoting the insurance industry. It was a landmark piece of legislation that ended the state monopoly on insurance, opening the sector to private players and foreign investment. This act fundamentally transformed the Indian insurance market, fostering greater competition and growth.

Agriculture Insurance Company of India Limited

The Agriculture Insurance Company of India Limited (AICIL) is a specialized public sector insurer established in 2002 by the Government of India. It was created to provide coverage and financial support to farmers in the event of crop failure due to natural calamities, pests, or diseases. Its flagship scheme, the Pradhan Mantri Fasal Bima Yojana (PMFBY), is a major government initiative aimed at stabilizing farm incomes.

ECGC Limited

ECGC Limited (formerly known as the Export Credit Guarantee Corporation of India Ltd.) is a government-owned enterprise that provides export credit insurance support to Indian exporters. It was established in 1957 to promote exports by protecting companies from the risks of non-payment by overseas buyers due to commercial or political uncertainties. For over six decades, it has been a key financial institution in bolstering India’s international trade.