The Ministry of Law and Justice on March 25, 2021 has issued the Insurance (Amendment) Act, 2021 to further amend the Insurance Act, 1938. The newly amended act shall come into force on such date as the Central Government may appoint.
The Act increases the Foreign Direct Investment (FDI) limit in the sector to 74 percent and removes restrictions on ownership and control.
As per the amendment;
“ In the Insurance Act, 1938 (hereinafter referred to as the principal Act), in section 2, in clause (7A), for sub-clause (b), the following sub-clause shall be substituted, namely:—
“(b) in which the aggregate holdings of equity shares by foreign investors including portfolio investors, do not exceed seventy-four per cent. of the paid-up equity capital of such Indian insurance company, and the foreign investment in which shall be subject to such conditions and manner, as may be prescribed;”