Insurance Newsletter – February 2015

REGULATORY UPDATES

THE INDIAN INSURANCE COMPANIES (FOREIGN INVESTMENT) RULES, 2015 NOTIFIED

Pursuant to the promulgation of the Insurance Laws (Amendment) Ordinance, 2014 ("Ordinance"), the Ministry of Finance, Government of India has, by way of a notification dated 19 February, 2015 notified the Indian Insurance Companies (Foreign Investment) Rules, 2015 ("Foreign Investment Rules") to implement the decision of increase in the foreign investment limit in the insurance sector to 49%.

The Foreign Investment Rules will now have to be placed before each House of Parliament for thirty days. If both Houses modify the Foreign Investment Rules or agree that such Rules should not have effect or have effect only in a modified form then they will not have effect or have effect in such modified form. Since the ruling party has a majority in the Lower House of Parliament, it is unlikely that the Foreign Investment Rules will be amended by Parliament. However, the fate of