Friday, December 6, 2013

No foreign company functioning in insurance sector, says IRDA

In a written reply to a question in the lower house of parliament, the Minister of State for Finance Mr. Namo Narain Meena said that there is no foreign company is presently functioning in India. The Insurance Regulatory and Development Authority (IRDA) had informed the minister about the same.

However, foreign companies are present in India as insurance joint venture partners with their domestic partners with a Foreign Direct Investment (FDI) ceiling of 26%. As per current law, no foreign investor can have more than 26% of stake in an insurance joint venture in India. The Insurance (Amendment) Bill 2008, seeking to raise FDI ceiling to 49 % has failed to get the necessary parliamentary nod as the Standing Committee on Finance, headed by senior BJP leader Yashwant Sinha, did not favour this. However, the Union Finance Minister has recently said that the government is committed to table the bill in winter session of the Parliament.

At present 38 private insurance companies are functioning in India along with their joint venture partners, Mr. Meena said.

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