Foreign Direct Investment (FDI) increase in the insurance sector | UPSC CURRENT AFFAIRS |
Foreign Direct Investment (FDI) increase in the insurance sector: Current Affairs
Foreign Direct Investment (FDI) increase in the insurance sector.
Context: Rajya Sabha passes Bill to raise the FDI limit in the insurance sector.
More about the news:
- The Insurance Amendment Bill 2021 that increases the maximum foreign investment allowed in an insurance company from 49% to 74% was passed by Rajya Sabha.
- To raise the foreign direct investment (FDI) limit, the Finance Ministry said insurance companies are facing liquidity pressure and the higher limit would help meet the growing capital requirement.
- Definition of ‘control’ of the insurance company with the hike in FDI limit, Ministry said control means right to appoint a majority of directors, control the management of policy decisions including under their shareholding or management right or shareholder agreements or voting agreements.
- By raising the FDI limit to 74 per cent, the current provision of control being vested with Indian companies had to be dropped.
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