Policy alert: Foreign investment in Indian insurance companies
April 19, 2021
Government Publishes Draft of Conditions for Foreign Investment in Indian Insurance Companies
The Insurance (Amendment) Act, 2021 (“Amendment Act”) amended the Insurance Act, 1938 (“Insurance Act”) with effect from April 1, 2021, to increase the cap on foreign investment in Indian insurance companies (“IICs”) from 49% to 74%. The Amendment Act stipulated that foreign investment in IICs would be subject to the manner and conditions, as would be prescribed by the Central Government, in exercise of its powers under Section 114(2)(aaa) of the Insurance Act.
On April 15, 2021, the Ministry of Finance (Department of Financial Services) published a draft of the Indian Insurance Companies (Foreign Investment) (Amendment) Rules, 2021 (“Draft FI Rules”) to amend the Indian Insurance Companies (Foreign Investment) Rules, 2015 (“Foreign Investment Rules”), proposing several conditions which will apply in the context of foreign investment in IICs.
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