Trinamool Congress, 3 others oppose hike in foreign investment limit in insurance

NEW DELHI: Members of four political parties, including TMC and CPI-M, expressed their opposition to raising foreign investment limit in insurance sector, saying it was neither in the interest of the segment nor the policyholders.

"The further hike in FDI may not be in the interest of the Indian insurance sector and the economy and against the interest of policyholders," said P Rajeev (CPI-M), Ram Gopal Yadav (SP) and K C Tyagi (JDU) in a dissent note to the report of the Select Committee on Insurance Bill.

In a separate dissent note, TMC member Derek O'Brien said, "An increase in FDI is neither necessary nor expedient. Therefore I strongly suggest that the limit for foreign investment in the insurance be retained at 26 per cent and that the portfolio investment should be under no circumstances be permitted".

The Rajya Sabha in August appointed a 15-member select committee to scrutinise the long pending Insurance Laws (Amendment) Bill, 2008. The Bill was held up for nearly six years on account of political differences.

The government is likely to bring the Bill for consideration of the Upper House as early as next week.

The dissent note submitted by CPI-M, SP and JDU said that they could not find any link between increasing FDI and increasing penetration of insurance.

In his dissent note, Brien said insurance penetration has improved by hardly 1 per cent from 2.71 per cent in 2001 to 3.9 per cent in 2013. Insurance penetration has in fact been falling steadily from 2009.