Indian parliament passes Insurance Bill

The upper house of the Indian parliament, Rajya Sabha, has passed a bill which will raise the foreign direct investment (FDI) cap in the insurance sector to 49 percent from 26 percent.

The new cap could increase the appeal of the Indian insurance market to overseas companies.

Following the vote, the American Insurance Association (AIA) issued a statement welcoming the passage of the legislation.

Stephen Simchak, director of international affairs for the AIA, said: “AIA and its members are very glad that US property-casualty insurers and other insurers will be able to invest more in the Indian market. The government in New Delhi made it clear from the outset that attracting more investment in India’s growing economy is a priority or them, and pushing this bill through the parliament is evidence of that determination.

“In addition to attracting more investment to India, increased engagement in the Indian market from US insurers will lead to greater access to insurance and more choices for Indian consumers. Economic stability and social stability in any country are directly related to the uptake of insurance. India currently is very under-insured, particularly in light of its significant economic growth and expanding middle class.

“This legislation passed the parliament because the benefits of an open and developed insurance market are enormous. It passed because the members of the Parliament recognised that taking this important step toward more investment and greater access to insurance is in the interests of India’s citizens and growing economy. We look forward to seeing the positive effects that today’s vote will have in India.”