Cabinet may retain FDI cap in insurance sector at 26 pc

Wednesday 09, May, 2012 The government may retain foreign direct investment in the insurance sector to existing 26 per cent as recommended by Standing Committee on Finance. The issue of foreign investment in insurance sector is on the agenda of the Cabinet, which will meet tomorrow, sources said. As per the current regulation, a foreign player cannot have more than 26 per cent stake in private insurance companies in the country. The Standing Committee had rejected the government's proposal to raise foreign direct investment ceiling to 49 per cent in December last year. The committee in its report on the Insurance Laws (Amendment) Bill, 2008, had said the proposal to increase the FDI cap to 49 per cent in insurance companies seems to have been decided upon "without any sound and objective analysis of the status of the insurance sector following liberalisation".

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