Lok Sabha passes Bill on 100% FDI in insurance
GS3Economy · S&T · Environment · Security· Industry, investment & MSMEs· Prelims + Mains·
Why in news
The Lok Sabha passed a Bill to increase Foreign Direct Investment (FDI) in the insurance sector to 100% to boost capital infusion and technology.
Background
The Bill amends several insurance laws to allow 100% FDI and reduces the net owned fund requirement for foreign reinsurance branches. It also empowers the Insurance Regulatory and Development Authority (IRDAI) to disgorge wrongful gains from insurers and intermediaries.
Facts for Prelims
- FactFDI limit in the insurance sector is being raised to 100%.
- BodyIRDAI: Empowered to disgorge wrongful gains from insurers and intermediaries.
- FactThe Bill reduces the net owned fund requirement for foreign reinsurance branches.
For Mains
Q. Discuss how liberalizing FDI in the insurance sector can enhance financial inclusion and improve the quality of insurance products in India.
Dimensions to cover in your answer
- Capital infusion: Increased liquidity to expand insurance coverage in rural and underserved markets
- Regulatory oversight: IRDAI's enhanced powers to curb wrongful gains and ensure market integrity
- Technological leap: Leveraging global expertise to improve insurance product quality and customer experience
Keywords: Capital infusion · Financial inclusion · Regulatory oversight · Market integrity · Liberalization
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