CURRENT AFFAIRS

Detailed explanation-1: -Nirmala Sitharaman announced that the Government will amend the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% and allow foreign ownership and control with safeguards.

Detailed explanation-2: -The regulator may allow 100% FDI in new lines of insurance business to expand the scope of the sector. At present, the upper limit for FDI is 74% into companies that write insurance cover.

Detailed explanation-3: -The Government has capped 20% FDI limit in LIC under the automatic route. The existing policy allows 74 % foreign investment in an Indian insurance company, LIC being a corporation incorporated under the special act of the parliament was not covered there.

Detailed explanation-4: -(f) (g) The foreign investment up to seventy-four percent of the total paid-up equity of the Indian Insurance Company shall be allowed on the automatic route subject to approval/verification by the Insurance Regulatory and Development Authority of India.

Detailed explanation-5: -"These rules may be called the Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2022, ” said a gazette notification issued recently. The notification has inserted a paragraph in the existing policy, allowing up to 20 per cent FDI in LIC through the automatic route.