Zee Media Bureau
New Delhi: The insurance sector amendment bill, which seeks to hike the foreign equity cap on domestic companies from 26 percent to 49 percent will be taken up in Rajya Sabha on Thursday.
Formally called the Insurance Laws (Amendment) Bill, it seeks to replace an ordinance that was promulgated earlier. The Insurance Laws (Amendment) bill, 2015, had come under sharp attack from various quarters.
The bill seeks to amend the Insurance Act, 1938 and the General Insurance Business (Nationalisation) Act 1972 and the Insurance Regulatory and Development Authority Act, 1999. It provides for raising FDI cap in insurance sector from 26 percent to 49 percent.
The bill now faces a crucial test in the Rajya Sabha, the upper house, where the ruling Bharatiya Janata Party (BJP) does not enjoy a majority. In the 243-member Rajya Sabha, the NDA has 59 members while the BJD has seven.
The amendment is expected to bring in much needed additional equity to the tune of Rs.25,000 crore to the insurance sector.
Insurance companies have a low level of penetration in the country for want of capital, with life insurance at below 4 percent of GDP and general insurance at less than 1 percent.
With Agency Inputs
