Government notifies final rules for 74% foreign investment in insurance sector May 20, 2021 × Rules expected to benefit 23 private life insurers, 21 private non-life insurers and 7 specialised private health insurance companies The Finance Ministry has notified final rules for foreign investment limit of 74 per cent in the insurance sector, which came into effect on May 19, 2021. The new arrangement is expected to benefit 23 private life insurers, 21 private non-life insurers and 7 specialised private health insurance companies. Considering the capital required for pandemic induced expansion needs, finalisation of rules will be helpful for the insurance sector, officials feel. One of the major proposals is the additional layer of solvency margin for higher limit of foreign investment. It prescribes 50 per cent of net profit in a financial year needs to be retained in the general reserve provided the solvency margin is lower than 1.2 times of the control level of solvency and the payment of dividend on equity shares.