REMOVING FDI CAP IN INSURANCE CALLS FOR SHARPER REGULATION

T HE Union Cabinet, on Friday, finally bit the bullet and cleared a proposal to raise the FDI cap for insurance companies to 100 percent from 74 percent.

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On Monday, the government may table the Insurance Laws (Amendment) Bill, 2025, in Parliament. It wants to attract longterm global investors and bolster the insurance sector's capital base. This decision had remained in limbo for a long time. In 2022, the government floated a draft Insurance Amendment Bill that raised the FDI cap to 100 percent. However, with the general election due in 2024, it decided not to move ahead with the politically sensitive legislation. After the NDA returned to power that year, Finance Minister Nirmala Sitharaman announced in last year's Budget that the FDI limit would be raised to 100 percent for insurers that invest their entire premium income in India.