General insurers favour to increase FDI limit to 74%

General insurers are in complete support of raising foreign direct investment (FDI) limit in the sector to 74%. Recently, the General Insurance Council (GIC), the representative body of general insurance, health insurance and reinsurance companies in India, met to discuss the view of insurance companies in raising the FDI. All the companies agreed on raising FDI limit to at least 74 per cent. “Prima facie no company had reservations in increasing the FDI limit to 74 per cent,” said sources. Also several companies are in favour of 100 per cent FDI in the sector. “The government is also considering the option of 100 per cent FDI in insurance. Insurance companies had several meetings on the matter with the government,” according to a source. However, a few insurance firms, especially private ones who have foreign partners, raised concerns over issues such as valuations, although in-principal they agreed on raising FDI limit. “Some joint venture partners may see change in positions in case FDI limit is raised to 74 per cent. That is why some companies had some concerns about safeguards, although no company opposed FDI,” said the source. Notably, the Insurance Regulatory Development Authority of India (IRDAI) recently sought suggestions from various stakeholders on raising FDI to 74 per cent. At present, FDI up to 49 per cent is allowed in the insurance sector through the automatic rout. Earlier, the approval for investment up to 49 per cent required approval by the Foreign Investment Promotion Board (FIPB), which was disbanded two years ago.