IRDAI Guidelines On "Indian Owned & Controlled"

The Indian insurance sector has witnessed sweeping changes in the regulatory regime from the commencement of this year. These changes commenced with the passing of the Insurance laws (Amendment) Ordinance in December 2014 which was later enacted as the Insurance laws (Amendment) Act 2015 (Amendment Act). Arguably, the most significant change introduced by the Amendment Act was the increase in the permissible foreign investment limit in Indian Insurers from the then existing 26% of the paid-up capital of such companies to 49%, provided that the Indian Insurers were 'Indian owned and controlled'.

As a first step to providing a framework for implementing the increase in foreign investment, the Ministry of Finance notified the Indian Insurance Companies (Foreign Investment) Rules 2015 (Rules) on 19th February 2015. The Rules provide that approval from the Foreign Investment Promotion Board, Department of Economic Affairs, Ministry of Finance (FIPB) will need to be