Indian lawmakers approve higher FDI for insurers

It will expand insurance penetration and boost valuation of insurers.

The two houses of the Indian Parliament have approved a bill that will hike insurers’ foreign direct investments (FDI) to 74%, reports Bloomberg.

The foreign ownership cap will help expand insurance penetration in the country and make long-term funding available for infrastructure development.

It will also boost valuation of the country’s insurers, as Prime Minister Narendra Modi seeks to take state-run Life Insurance Corporation of India public.

FDI in insurance would help get more investment and competition in the sector and ease stress for insurance companies, Finance Minister Nirmala Sitharaman said.

The revised ownership limits are subject to safeguards, including retaining majority of the company’s board and key management positions with resident Indians and keeping a specified percentage of profits as general reserve.

Here’s more from Bloomberg.