The Government had introduced the Insurance Laws (Amendment) Bill, 2008 in the Rajya Sabha on 22.12.2008. The Bill, inter-alia, provides for holding of equity shares in Indian insurance companies by a foreign company, either by itself or through its subsidiary companies or its nominees to not exceed forty-nine percent of paid up equity capital. An increase in foreign equity share limit in insurance sector will potentially enable additional capital flows into the sector.

Assessing and obtaining stakeholders` views through various means is a regular feature of Government functioning, including in the insurance sector.

This information was given by the Minister of State for Finance, Smt. Nirmala Sitharaman in written reply to a question in Lok Sabha today.

Foreign equity limit in insurance allows foreign companies to hold substantial stakes in insurers, enabling additional capital inflows. Increase in foreign equity share limit in the insurance sector contemplates permitting foreign companies, directly or through subsidiaries or nominees, to hold up to forty-nine percent of paid up equity capital in Indian insurance companies, as provided in the Insurance Laws (Amendment) Bill, 2008; the measure is presented as enabling additional capital flows and accompanied by stakeholder consultation.