ANNOUNCEMENT 02 Sep 2019
India has increased the foreign equity investment limit in insurance intermediaries from 49% to 100%.
NUMBER OF INTERVENTIONS
Notification G.S.R. 619(E) - Ministry of Finance
On 2 September 2019, the Indian Ministry of Finance through the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2019 has increased the foreign equity investment limit in insurance intermediaries from 49% to 100%. Foreign investments in such companies fall under the automatic route i.e. they do not require prior approval from the government before making such investments. However, the investments will be subject to verification by the Insurance Regulatory and Development Authority of India (IRDAI).
The Rules provide for additional requirements, as below, for any insurance intermediary that has a majority shareholding of foreign investors -
The Rules also specify that in case an entity (such as a bank), whose primary business is outside the insurance area, is permitted by the IRDAI to function as an insurance intermediary, the foreign investment limits of the original sector will continue to apply as long as the share of revenue from the primary business is greater than 50% of the total revenue.