India’s Parliament has accepted laws that may elevate the overseas direct funding (FDI) cap within the insurance coverage sector from 74% to 100%.
This modification is a part of the Sabka Bima Sabki Raksha (Modification of Insurance coverage Legal guidelines) Invoice, 2025, which additionally grants new regulatory authority to the Insurance coverage Regulatory and Growth Authority of India (IRDAI) over issues similar to fee funds.
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The invoice was first proposed in December final yr.
Whereas introducing the invoice within the Lok Sabha, the decrease home of the parliament, Finance Minister Nirmala Sitharaman mentioned: “The amendments are anticipated to additional strengthen job creation, ability growth and formal employment,” reported Reuters.
The brand new legislation amends a number of long-standing acts together with the Insurance coverage Act of 1938, the Life Insurance coverage Company Act of 1956, and the Insurance coverage Regulatory and Growth Authority Act of 1999.
These amendments are supposed to open up additional funding alternatives within the sector and replace how the market is supervised.
A provision within the invoice permits for non-insurance firms to merge with insurance coverage operators, giving extra flexibility for enterprise restructuring.
The IRDAI now has particular legislative powers to set limits on commissions, remuneration, or rewards paid to brokers and intermediaries, in addition to regulate cost strategies and disclosure guidelines.
Any particular person performing as an insurance coverage middleman with out registration below part 42D faces a minimal penalty of Rs100,000 ($1,105), which might improve to to Rs1m.
Appointing unregistered intermediaries or conducting insurance coverage enterprise via them could end in a minimal penalty of Rs1m, growing to a most of Rs100m.
This growth follows the authorities’s earlier transfer in 2021, when the FDI restrict was elevated from 49% to 74%.
