The Central government is looking at allowing 100% foreign direct investment (FDI) in insurance broking. A committee comprising senior officials from finance ministry and department of industrial policy and promotion (DIPP) will review the idea, a senior government official said.
At present, up to 49% FDI is allowed under the automatic route in the insurance industry, including insurance broking companies.
“The proposal has been there for a long time. There were some reservations from the insurance regulator, so now it is being deliberated at the highest level,” the official said.
The industry seems divided on the issue. A senior executive with an insurance broking firm said brokers are akin to financial intermediaries and under the existing FDI policy, full foreign investment is allowed for intermediaries.
However, there is some opposition from existing brokers, many of whom started operations from 2003, the executive said. “They don’t want to be overtaken by their foreign partners.”
He said Insurance Brokers Association of India had also raised concerns over increasing the limit.