Government proposed to increase the FDI limit in the insurance sector to 100%

Government proposed to increase the FDI limit in the insurance sector to 100%.
The government has proposed to raise the Foreign Direct Investment (FDI) limit for Indian insurance companies from 74% to 100%.
The FDI limit in the insurance sector was previously increased from 49 per cent to 74 per cent in February 2021.
The government stated that the proposal to amend certain provisions of insurance laws aims to ensure the accessibility and affordability of insurance for citizens and foster the expansion and development of the insurance industry.
The requirement of Net Owned Funds for foreign reinsurers is also proposed to be reduced from Rs 5,000 crore to Rs 1,000 crore.
As per the economic survey, insurance penetration in India has slightly decreased from 4.2 per cent in FY22 to 4 per cent in FY23.
The government is taking steps to open up the insurance market as part of a broader goal to achieve “Insurance for All” by 2047.