The Department of Industrial Policy & Promotion, New Delhi (DIPP) has vide its press release no. 2/2014 dated 4/2/2014 revised the FDI limits in the insurance sector in the country. Hitherto, FDI in insurance was allowed upto 26% in the automatic route, subject however to the conditions that the companies bringing in FDI will obtain the necessary license from the sector regular i.e. IRDA. Under the old guidelines, only FDI was allowed in the insurance sector. FII and NRI investment was not allowed.
The revised guidelines allows 26% by way of FDI or FII or NRI investment on automatic route. Further the guidelines are relaxed not only for insurance companies, but also for insurance brokers, Third Party Administrators (TPAs) and Surveyors & Loss Assessors. The other conditions of obtaining license from IRDA still continues. Bank promoted insurance companies also need to comply with sectoral guidelines in the FDI policy related to the banking sector.
The revised guidelines can be found at this link viz. http://dipp.nic.in/English/acts_rules/Press_Notes/pn2_2014.pdf