Insurance Bill To Be Tabled In Parliament Today

The Narendra Modi government is will push major reforms today by introducing the Insurance Amendment Bill and the Sebi Act in the Parliament. The Sebi Act would provide more teeth to the market regulator.

The Insurance Bill seeks to increase the ceiling on foreign direct investment (FDI) in insurance to 49% from the present 26%.

Ironically, the BJP had earlier opposed raising the cap on FDI in insurance when the party was in opposition. The Congress-led UPA government had first introduced the Insurance Bill in 2008. It had also tried to introduce the bill again in 2013.

The BJP-led NDA has a brute majority in the Lok Sabha and the bill will be passed easily. However, it will need the Congress' support in the Rajya Sabha, where it is in a minority. The Congress has indicated that it might support the bill.

The new measures will allow insurance companies to list on stock exchanges.

To address concerns that Indian entities may lose control, the bill provides that the management must remain with Indian companies. Moreover, the approval of the Foreign Investment Promotion Board will also be required on any investment over 26%.