New Delhi: The Lok Sabha on Monday passed the Insurance (Amendment) Bill 2021, which aims to raise the limit of foreign investment in an Indian insurance company from the existing 49 to 74 per cent.

Moving the Bill, Finance Minister Nirmala Sitharaman said that the insurance sector requires a huge and long-term investment as it is a capital-intensive sector. She said, raising the ceiling limit to 49 per cent in the year 2015 has resulted foreign direct investment of 26 thousand crore rupees in the past five years. She said, assets under management registered the growth of 76 per cent within this period.

The Insurance (Amendment) Bill, 2021 passed in Lok Sabha.

— ANI (@ANI) March 22, 2021

Sitharaman introduced the Bill for amendments in the Insurance Act, 1938. The Union Cabinet on March 17, 2021 had given its nod for amendments in the Insurance Amendment Bill 2021. The permissible FDI limit in life and general insurance stood at 49 per cent with ownership and management control with Indians.

The Rajya Sabha on March 18th, 2021 passed the bill in the assembly.

While addressing the Rajya Sabha, Union Minister Nirmala Sitharaman said, “FDI limit is not a compulsion; it only sets the upper limit. Increasing the limit does not mean automatic foreign investment to that level to all companies. Every company will decide for themselves, whether they want that money, to what extent, and so on.”

She added, “This enabling amendment is only to allow them to receive some money but not exceed 74 per cent. The policyholders’ money that is going to be collected will have to be invested within India only. It cannot be crossing our boundaries.”

She further said that when money comes and when there is more competition, the common people of India will have a better deal given to them and a better negotiating premium and better package.

“Competition is strictly for betterment,” she added.