The insurance sector has been the subject of debate when it
comes to foreign investment. After a long prolonged battle, the
sector was finally opened to 49% foreign investment, with
investment above 26% being under the government approval route. The
Finance Minister, in his speech while introducing the budget for
2016-17 had indicated further liberalization in some sectors with
respect to foreign investment. Insurance sector was one of the
beneficiaries
Background
The Insurance Laws (Amendment) Act, 2015 ("2015
Amendment") received the assent of the President of
India in March, 2015, effective from December 26, 2014. The 2015
Amendment increased the extent of foreign investment in the
insurance sector from 26% to 49%. While investment till 26% was
under the automatic route, any investment above 26% required the
approval of the foreign investment promotion board
("FIPB"). In addition, the Central
Government had notified the Indian Insurance Companies
