Finance minister Nirmala Sitharaman introduced the Insurance (Amendment) Bill, 2021 in the Lok Sabha on Monday. The amendment bill seeks to hike the FDI limit in insurance from 49 percent to 74 percent.
The finance minister while introducing the bill said that raising the FDI limit in the insurance sector to 74 percent was necessary to help insurers deal with issues concerning financial stress.
The minister observed that the FDI limit was being raised on the recommendations of the regulator IRDAI which had held extensive consultations with the stakeholders.
The FDI inflow in the insurance sector, the minister said, had increased significantly after the government decided to raise the cap from 26 percent to 49 percent in 2015.
As much as Rs 26,000 crore has come as FDI in the insurance sector since 2015, she said, adding the asset under management (AUM) in this sector too has grown by 76 percent during the last five years.