FDI proposal for bank-promoted insurance firm to be vetted by RBI, Irdai orissapost.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from orissapost.com Daily Mail and Mail on Sunday newspapers.
Read more about Insurance companies seek early implementation of IFRS from govt on Business Standard. Currently, India follows the old solvency standards where insurers have to hold a percentage of reserve as capital.
The finance ministry has notified the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2021 that require insurers with foreign ownership of over 49 per cent to maintain a solvency margin of 180 per cent if they declare dividend payments in a financial year. The government had sought public comments on draft rules issued on April 15, and has now notified the rules further to amend the Indian Insurance Companies (Foreign Investment) Rules, 2015. According to the rules notified, if insurance companies with foreign ownership above 51 per cent repatriate profits in the form of dividend to their shareholders, but cannot meet the 180 per cent margin requirement, they will have to set aside 50 per cent of their net profit in a general reserve.
Budget 2021 | Amendments required for liberalisation of insurance sector
Since the objective of the government is to bring an impetus to FDI inflow in insurance companies, stakeholders will now be very keen to learn the fresh terms and conditions that will act as riders to their ability to own and control insurance companies Indranath Bishnu February 04, 2021 / 09:00 AM IST
As part of the Budget presented by Finance Minister Nirmala Sitharaman on February 1, the government’s proposal to further liberalise foreign direct investment (FDI) in Indian insurance companies to up to 74 percent from the existing 49 percent cap was announced. This proposal is followed by the raise in FDI limits for investment in insurance intermediaries to up to 100 percent, which was announced by Sitharaman in her maiden Budget speech in July 2019, and effected subsequently in September 2019.