Insurance Bill 2021 allowing hike in FDI to 74pct passed in Rajya Sabha with voice vote

This Bill will allow the foreign investment cap in the insurance sector from 49 per cent to 74 per cent.

Replying to the discussion, Finance Minister Nirmala Sitharaman said that this hike will help meeting the growing capital requirement of insurance companies.

"Insurance is a highly regulated sector. The FDI limit is not compulsory but only increasing the upper limit. The policy holder's money that is collected will have to be invested here in India only", she said.

The policy holder's money that will be collected will have to be invested here in India only and this will lead to greater competition among the insurance companies will lead to better choices and better deal and better-negotiated premium for a customer, she said.

Replying to Congress Member Anand Sharma, Sitharaman said that this Bill was brought after the insurance regulator IRDA which consulted 60 insurance companies, promoters, leading industry leaders and chambers.

Elaborating on the insurance sector scenario in India, Sitharaman said that this sector was broadly categories into two, general and life insurance firm.

"General insurance takes care of health and other issues and farm insurances. All together there are seven public sector insurance firms and 61 private sector firms which are working in India with the total employees and agents in public sectors has been over seven lakhs while the private sector has nearly 23 lakh," she added.

"The control and ownership have been allowed with safeguards. This bill is in alignment with the FDI policy of the country. The capital available in the country is only to supplement what is available in the country therefore we need to supplement this will increase the penetration of insurance in the country," she further said.