Indian Insurance Companies (Foreign Investment) Rules, 2015

On 19-02-2015, the Central Government made the Indian Insurance Companies (Foreign Investment) Rules, 2015. The objective of the Rule is to specify the quantum of Foreign Direct Investment allowed in the Indian Insurance Company and further information thereto. The Rules provides that:

• The aggregate holdings by way of Total Foreign Investment by foreign investors should not exceed 49% of the paid up equity capital of an Indian Insurance company.
• Ownership and control of an Indian Insurance company shall remain at all times in the hands of resident Indian entities.
• Foreign Direct Investment proposals upto 26 % of the total paid up equity of the Indian Insurance Company shall be on the automatic route; above 26% and upto the cap of 49% shall be on the FIPB route.
• Foreign Portfolio Investment in an Indian Insurance Company shall be governed by provisions of FEMA Regulations, 2000 and SEBI (Foreign Portfolio Investment) Regulations.
• Any increase in foreign investment of an Indian Insurance Company shall be in accordance with the pricing guidelines specified by Reserve Bank of India under FEMA.
• Foreign equity investment cap of 49% shall also apply to Insurance Brokers, Third Party Administrators, Surveyors and Loss Assessors and other insurance intermediaries appointed under the provisions of IRDA Act, 1999.

-Ministry of Finance