Rajya Sabha may take up Insurance amendment bill on Monday

NEW DELHI: The insurance amendment bill could not be taken up for discussion in the Rajya Sabha on Thursday as members sought time to study the proposed changes that include increase in foreign investment limit for the sector to 49% from the current 26%.

The bill was listed for discussion and passage in the upper house on Thursday. It is now expected to be taken up on Monday, finance ministry officials told ET.

The proposed amendments have already been circulated among members, and the cabinet had approved the bill last week. The 49% ceiling on foreign investment is proposed to be a composite one that will include FDI, portfolio investment,NRI investment and others.

While up to 26% foreign investment will be allowed automatically, over that government approval will be required. Additionally, the control of the insurance venture will have to remain in Indian hands.

The amendment is expected to bring nearly Rs 25,000 crore additional equity to the fund starved insurance sector in the country.

Insurance companies have been unable to expand their reach despite penetration level of life insurance below 4% of GDP and general insurance less than 1% of GDP for want of capital.

The government has proposed amendments to the Insurance Act, 1938, the General Insurance Business (Nationalisation) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999.