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ARTICLE · 11 JULY 2019

India's Budget For 2020 | Insurance Update

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The Union Budget 2020, announced on Friday, 5 July 2019, has proposed some significant changes for the insurance sector in India.

IndiaInsurance
Nikhil Narayanan
Nikhil Narayanan
Rohit Ambast
Rohit Ambast
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The Union Budget 2020, announced on Friday, 5 July 2019, has proposed some significant changes for the insurance sector in India.

100% FDI for brokers and other insurance intermediaries

The existing foreign direct investment (FDI) cap of 49% applies to the entire insurance sector in India, including brokers, corporate agents, third-party administrators, web aggregators and other insurance intermediaries. The government has now announced that FDI of up to 100% will be permitted for insurance intermediaries. This change does not apply to the remainder of the insurance sector.

The Insurance Regulatory and Development Authority of India (IRDAI) historically had concerns in relation to the potential relaxation of the FDI limit for insurance intermediaries, but more recently, its position appears to have softened. The change announced in the Union Budget is a welcome move as the highly fragmented insurance distribution market in India could benefit from international

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