4 March , 2020 Fdiindia
Govt Allows 100?I in Insurance Intermediaries: DPIIT
The government has sanctioned 100 per cent foreign direct investment in insurance intermediaries, the Department for Promotion of Industry and Internal Trade (DPIIT) announced last week.
As per DPIIT, the government has permitted 100 per cent foreign direct investment or FDI in insurance intermediaries under the automatic approval route, making way for large-scale overseas investments in the insurance sector.
The Department said that insurance intermediary that has a majority shareholding of overseas investors would have to undertake measures including incorporation as a limited company under the provisions of the Companies Act 2013.
Meaning that at least one out of the chairman of the board of directors -- the CEO, principal officer, or MD of the company shall be an Indian citizen residing in the country, shall take authorization of the IRDA for repatriating dividend, and shall not make any payments to the foreign groups, promoter, or associate entities beyond what is necessary or allowed.
Insurance brokers, reinsurance brokers, insurance consultants, corporate agents, third party administrators, surveyors and loss assessors, all come under intermediary services.
Last there was buzzing with speculations that the government planned on modifying foreign direct investment limits in aviation and insurance intermediaries.
The insurance industry is expected to reach USD 280 billion by 2020.