The increase in the foreign investment limit for Indian insurance companies from 49% to 74% stands fully operationalized as of August 19, 2021, by virtue of the Foreign Exchange Management (Non-Debt Instruments) (Second Amendment) Rules, 2021 being notified on August 19, 2021, which amended the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. A summary of the key amendments issued in this regard are as follows:
i. Amendments to the (Indian) Insurance Act, 1938, came into force on April 1, 2021, increasing the foreign investment limit to 74% and removing the ‘Indian owned and controlled’ requirement. Please follow the link for more details in this regard;
ii. The Indian Insurance Companies (Foreign Investment) Amendment Rules, 2021 were notified on May 19, 2021, by the Ministry of Finance, Government of India, which amended the Indian Insurance Companies (Foreign Investment) Rules, 2015; and
iii. The IRDAI issued a Circular on July 30, 2021, withdrawing the Guidelines on Indian owned and controlled dated October 19, 2015.