The long pending Insurance Bill, which seeks to raise FDI cap in the sector to 49 per cent, is expected to be taken up in the forthcoming Winter Session of Parliament.
“The Select Committee is looking into the Bill. We will take it up in the Winter Session,” a top finance ministry official said.
The reform, according to experts, is expected to increase the flow of foreign investment to the tune of Rs 25,000 crore into the private insurance companies. The move would help insurance firms to get much needed capital from overseas partners.
There are about two dozen private sector insurance firms both in life and non-life segment.
The Insurance Laws (Amendment) Bill, which proposes to hike the FDI limit in the insurance sector to 49 per cent, has been caught in a logjam with the Congress-led opposition insisting that it be referred to a select committee.
Bowing to opposition pressure, the government had in August agreed to refer the controversial Insurance Bill to the 15-member Select Committee. The committee is expected to submit its report by the third week of November.
In his Budget 2014-15 speech, Finance Minister Arun Jaitley had said that the insurance sector is investment starved and there is a need to increase the composite cap in the sector to 49 per cent, with full Indian management and control, through the FIPB route.