The Rajya Sabha has passed the Insurance (Amendment) Bill, 2021. It seeks to amend the Insurance Act, 1938 which will increase the limit of foreign investment allowed in Indian insurance companies.
Daily Current Affairs Quiz 2021
The Bill amends the Insurance Act, 1938 to increase the maximum foreign investment allowed in an Indian insurance company.
The Act provides the framework for functioning of insurance businesses and regulates the relationship between an insurer, its policyholders, its shareholders, and the regulator (the Insurance Regulatory and Development Authority of India).
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 an Indian entity.
The Bill increases the limit on foreign investment in an Indian insurance company from 49% to 74%, and removes restrictions on ownership and control.
However, such foreign investment may be subject to additional conditions as prescribed by the central government.
