IBEF: July 08, 2019
The Government of India has expanded the foreign investment limit on insurance intermediaries to 100 per cent from 49 per cent earlier.
The declaration is set to get capital for organizations contributing in technology which is to help Indian insurance division to accomplish better penetration rates which at 3.6 per cent is much lower than the global average of over 6.1 per cent.
Moreover, the government is additionally mulling about decreasing the net owned fund requirement for reinsurers to Rs.1000 crore from Rs.5000 crore prior to pull international insurers discover better risk valuing for the premiums offered.
"To encourage on-shoring of international insurance exchanges and to empower opening of branches by outside reinsurers in the International Financial Services Center, it is proposed to diminish Net Owned Fund requirement from Rs.5000 crore to Rs.1000 crore," finance minister Nirmala Sitharaman said.
Reinsurers are those organizations which handle financial risks for insurance agencies that would be unreasonably huge for them to pay. As of now most reinsurance in the country is done by state owned General Insurance Company of India (GICNSE - 1.52 per cent).
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.