The Insurance Amendment Bill, which proposes allowing 100 per cent foreign direct investment (FDI) in the insurance sector, is expected to be introduced in the upcoming monsoon session of Parliament
New Delhi: The Monsoon session of Parliament will be held from July 21 to August 12, Union Minister Kiren Rijiju said on Wednesday.
The Cabinet Committee on Parliamentary Affairs, chaired by Defence Minister Rajnath Singh, has recommended the dates, he told reporters.
The Insurance Amendment Bill, which proposes allowing 100 per cent foreign direct investment (FDI) in the insurance sector, is expected to be introduced in the upcoming monsoon session of Parliament.
Though, ministry of finance officials earlier had indicated that the draft bill is ready and will be placed before Cabinet for its approval soon, sources said whether the Bill will be introduced in the Parliament will be clear closer to the commencement of the session.
The bill also includes provisions for composite licensing, allowing insurers to sell both life and non-life products under a single license.
Finance Minister Nirmala Sitharaman in this year’s Budget speech proposed to raise the foreign investment limit to 100 per cent from existing 74 per cent in the insurance sector as part of new-generation financial sector reforms.
“This enhanced limit will be available for those companies which invest the entire premium in India. The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified,” she had said.
The insurance industry is keenly waiting the Insurance Amendment Bill along with a new chairman of the IRDAI.
Sources said, the appointment of a new chairman is getting delayed as the government is also thinking about new names for the post.
Earlier, it was believed that Finance Secretary Ajay Sheth, who will be retiring in June end, is the final choice for the new chairman of the IRDAI, but it seems, the government has now different plans for Sheth and the latest buzz is that M Nagaraju, sececretary , Department of Financial services may be the new candidate for Hyderabad based insurance regulator.
Sources point that the government is keen to appoint somebody at the IRDAI, who has already experience in the sector and can address some of the burning issues in the industry including affordability of insurance products and falling penetration from the day one.
As part of comprehensive legislative exercise, the Life Insurance Corporation Act 1956, and the Insurance Regulatory and Development Authority Act, 1999 will be amended alongside the Insurance Act, 1938.
The amendments to LIC Act proposes to empower its board to take operational decisions like branch expansion and recruitment.
The Insurance Act, of 1938, serves as the principal Act to provide the legislative framework for insurance in India. It provides the framework for the functioning of insurance businesses and regulates the relationship between an insurer, its policyholders, shareholders and the regulator IRDAI.
Currently, there are 25 life insurance companies and 34 non-life or general insurance firms in India. These include companies like Agriculture Insurance Company of India Ltd and ECGC Ltd..