On Tuesday, the Department for Promotion of Industry and Internal Trade (DPIIT) notified the government's decision to allow 100 percent foreign direct investment (FDI) in insurance intermediaries.
Intermediary services include insurance brokers, reinsurance brokers, insurance consultants, corporate agents, third party administrators, surveyors and loss assessors.
Earlier, only 49 percent foreign investment in the insurance sector was allowed including insurance intermediaries.
DPIIT in its press note said that 100 percent FDI will be allowed in insurance intermediaries under the automatic approval route.
It said that insurance intermediary that has majority shareholding of foreign investors shall undertake measures including incorporation as a limited company under the provisions of the Companies Act 2013; at least one from among the chairman of the board of directors or the CEO or principal officer or MD of the company shall be a resident Indian citizen, shall take permission of the IRDAI for repatriating dividend, and shall not make payments to the foreign group or promoter or associate entities beyond what is necessary or permitted.
Representations were made to the government that these intermediary services should be treated at par with other financial services intermediaries, where 100 percent foreign investment is permitted.