The Department for Promotion of Industry and Internal Trade (DPIIT) on Tuesday notified the government's decision to allow 100 per cent foreign direct investment (FDI) in insurance intermediaries.
Intermediary services include insurance brokers, re-insurance brokers, insurance consultants, corporate agents, third party administrators, surveyors and loss assessors.
The FDI policy earlier allowed 49 per cent foreign investment in the insurance sector, which includes insurance intermediaries.
In its press note, the DPIIT said 100 per cent FDI is allowed in insurance intermediaries under automatic approval route.
It said that insurance intermediary that has majority share holding of foreign investors shall undertake measures including incorporation as a limited company under the provisions of the Companies Act 2013; at least one from among the chairman of the board of directors or the CEO or principal officer or MD of the company shall be a resident Indian citizen, shall take permission of the IRDA for repatriating dividend, and shall not make payments to the foreign group or promoter or associate entities beyond what is necessary or permitted.
Representations were made to the government that these intermediary services should be treated at par with other financial services intermediaries, where 100 per cent foreign investment is permitted.