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In the run up to the Budget, life insurance companies have pitched for increasing the cap for foreign direct investment (FDI) in the sector from 49 per cent to 74 per cent.
The issue was taken up at a recent general body meeting of the Life Insurance Council, where life insurance companies were on the same page vis-a-vis the proposal to hike the FDI ceiling in the sector.
“All life insurance companies have said they are in favour of increasing the FDI cap, which can be decided by the government,” sources familiar with the development told BusinessLine .
Finance Minister Nirmala Sitharaman had in the Budget 2019-20 announced that the government would “examine suggestions of further opening up of FDI” in a number of sectors, including insurance, along with 100 per cent FDI in insurance intermediaries.
At present, FDI up to 49 per cent is allowed in the insurance sector through the automatic route. Following the Budget announcement on further opening up FDI in insurance sector, the insurance regulator had earlier this month sought views of stakeholders.
“Increasing the FDI cap will bring in more capital for these companies and give the foreign partner more say in the management of the companies. Many of the foreign partners are getting restless,” noted a source.
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