INSURANCE
IRDAI sets up seven-member committee to implement amendments to insurance law
Feb-21-2025

The Insurance Regulatory and Development Authority of India (Irdai) has set up a seven-member committee headed by former chairman of State Bank of India (SBI) Dinesh Khara to examine proposed amendments to the Insurance Act, 1938 and suggest a framework for its implementation. The government has proposed amendment to insurance law to increase foreign direct investment to 100 per cent and other changes.

Finance Minister Nirmala Sitharaman had announced in her Budget on February 1 that the FDI limit for the insurance sector would be raised from 74 to 100 per cent. This enhanced limit will be available for those companies which invest the entire premium in India. The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified.

To enhance the FDI limit, the government will have to bring amendments to the Insurance Act 1938, the Life Insurance Corporation Act 1956, and the Insurance Regulatory and Development Authority Act 1999. The Insurance Act 1938 serves as the principal Act to provide the legislative framework for insurance in India.The FDI limit in the insurance sector was last raised -- from 49 per cent to 74 per cent -- in 2021. In 2015, the government had hiked the FDI cap in the insurance sector from 26 per cent to 49 per cent.

The other members of the seven-member committee are N S Kannan, former MD and CEO of ICICI Prudential Life Insurance, Girish Radhakrishnan, former CMD of United India Insurance, Rakesh Joshi, former member of Irdai, Saurabh Sinha, former executive director of RBI, Alok Misra, MD and CEO of MFIN, and L Vishwanathan, a legal expert.

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