Seeking to attract more foreign investment, the government has relaxed FDI norms for insurance sector by permitting overseas companies to buy 49 per cent stake in domestic insurers without prior approval.
- Currently, FDI up to 26 per cent is permitted through automatic approval route. For FDI up to 49 per cent, the approval of Foreign Investment Promotion Board is required.
- There are 52 insurance companies operating in India, of which 24 are in the life insurance business and 28 in the general insurance.
- During April-December 2015, FDI into the country grew by 40 per cent to USD 29.44 billion.
Did You Know?
- In 1818 the advent of life insurance business descended in India with the establishment of the Oriental Life Insurance Company at Kolkata.
- In 1914, the Government of India started publishing returns of Insurance Companies in India.
- The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business being transacted in India.
- With the enactment of Insurance Amendment Act of 1950, the Principal Agencies were abolished.
- An ordinance was issued on 19th January, 1956 for nationalization of the Life Insurance sector in India and Life Insurance Corporation (LIC) came into existence in the same year.
- Following the recommendations of the Malhotra Committee report, the Insurance Regulatory and Development Authority (IRDA) Act, in 1999 was passed by the Indian Parliament.
Want to know about FDI & FII?
Check out the Article by D2G – FDI & FII Decoded