Government today decided to increase foreign direct investment ceiling in the insurance sector from 26% to 49% but ensured the management and control of the insurance joint ventures rests with Indians.
As per the FDI policy, control shall include the right to appoint a majority of the directors or to control the management or policy decisions including by virtue of their share holding or management rights, or shareholders agreements or voting agreements.
A higher FDI limit would provide capital to insurance companies struggling to expand, help increase insurance coverage in the country, create more jobs, generate more long-term savings, and pave way for insurance companies to list on stock exchanges.
