Centre allows 100% FDI in insurance via auto route

NEW DELHI: The finance ministry on Saturday notified the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2026, which allows 100% foreign investment in an insurance company through the automatic route. The notification states that foreign investment in Life Insurance Corporation continues to be capped at 20%.

"Foreign investment in this sector shall be subject to compliance with the provisions of the Insurance Act, 1938(4 of 1938), and the condition that companies receiving FDI shall obtain necessary licence or approval from the Insurance Regulatory and Development Authority of India to undertake insurance and related activities," the notification stated.

The notification also said that any increase in foreign investment in an Indian Insurance company shall be in accordance with the pricing guidelines specified under these rules.


In February, the government operationalised up to 100% foreign ownership in the insurance sector.

The Department for Promotion of Industry and Internal Trade issued in Press Note 1 (2026 Series) that foreign investment, including by portfolio investors in domestic insurance companies.

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The policy amendment aligns the foreign investment framework with the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025.

The finance ministry earlier notified that the provisions of the law, except Section 25, will take effect from February 5.

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Insurance companies with FDI must have at least one resident Indian citizen serving as chairperson, managing director or chief executive officer.

The 100% limit will also apply to insurance intermediaries including brokers, reinsurance brokers, corporate agents, third-party administrators, surveyors and loss assessors, managing general agents and insurance repositories, subject to IRDAI norms.