100% FDI For Insurance Intermediaries

Introduction

The Central Government has notified the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2020 (Amendment Rules) with effect from 27 April 2020.

The key change introduced pursuant to this Amendment Rules is the increase in the foreign equity investment limit in insurance intermediaries (such as insurance brokers, re-insurance brokers, insurance consultants, corporate agents, third party administrator, surveyors and loss assessors) from 49% to 100%.

Background

The Finance Minister, Nirmala Sitharaman, in the 2019 Union Budget had announced that the Government would allow 100% foreign investment for insurance intermediaries.

Subsequently, the Central Government had issued the Indian Insurance Companies (Foreign Investment) Amendment Rules 2019 to amend the Indian Insurance Companies (Foreign Investment) Rules, 2015. The amendment removed the cap on foreign equity investment for insurance intermediaries. While the Indian