New Delhi, May 2 (IANS) The Union government notified 100 per cent foreign direct investment (FDI) in the insurance sector under the automatic route, paving the way for greater participation by overseas investors, according to a report released on Saturday.
NDTV Profit has reported that foreign investment in insurance companies will be subject to compliance with provisions of the Insurance Act, 1938, and mandatory approval from the Insurance Regulatory and Development Authority of India (IRDAI) for undertaking insurance and related activities.
“However, Life Insurance Corporation of India (LIC) will continue to operate under a separate framework, with foreign investment capped at 20 per cent under the automatic route,” it said.
The report also added that investments in LIC will remain governed by the Life Insurance Corporation Act, 1956, along with applicable provisions of the Insurance Act.
The notification has stipulated that in insurance companies with foreign investment, at least one among the chairperson of the board, managing director or chief executive officer must be an Indian citizen resident.
In addition, 100 per cent FDI under the automatic route has been permitted for insurance intermediaries, including brokers, reinsurance brokers, insurance consultants, corporate agents, third-party administrators, surveyors and loss assessors, managing general agents and insurance repositories, as notified by IRDAI from time to time.
The move follows earlier steps by the Union government to liberalise the sector.
In February, the Department for Promotion of Industry and Internal Trade had notified allowing 100 per cent FDI in insurance, in line with legislative changes approved by Parliament in December 2025.
The amendments, introduced through the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, revised key provisions of the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999, aimed at enhancing capital inflows and expanding insurance penetration in the country.
The latest notification formalised the framework, a step in opening up the insurance sector while retaining safeguards for domestic oversight and regulation.
–IANS
ag/khz
