New Delhi: The Lok Sabha on Monday passed the Insurance (Amendment) Bill, 2021 by voice vote.
The Bill seeks to amend the Insurance Act, 1938 which will increase the limit of foreign investment allowed in Indian insurance companies.
The Bill provides to increase the foreign direct investment limit from existing 49 per cent to 74 per cent.
It also has a provision for removal of restrictions on ownership and control of the insurance companies.
Replying to the debate on the Insurance (Amendment) Bill, 2021, Union Finance Minister Nirmala Sitharaman said the Bill has already been passed in the Rajya Sabha.
The Union Finance Minister said this Bill is necessary to take the economy forward and increase the scope of the insurance sector in the country.
She said the scope of insurance is increasing and in the current era there is a dire need to bring more and more people under the purview of insurance and this can be possible only when competition in this field will increase and the insurance sector can be expanded.
Ms Sitharaman said it is necessary for the government and private companies of the insurance sector to increase foreign direct investment (FDI) in this sector.
She said the companies of the insurance sector who are sick and unable to work, do not let them go to waste and their work will continue, for this, foreign investment will be a lifeline for them.
It is the need of the hour to give sick companies of insurance sector an opportunity to work and the government is taking such steps that will benefit these companies, the Union Finance Minister said.
She said that this amendment was necessary and discussions have been held with the concerned parties and in view of the strong support from their side for foreign investment, the government has brought this Bill.
She said that with the arrival of foreign investment, where competition in the insurance sector will increase, people will get direct benefits of it.
People will get some more benefits along with the premium of insurance amount and the services of companies will improve more due to competition, she said.
The Union Finance Minister said that with the arrival of foreign investment in the insurance sector, more than one crore people will get an opportunity to work as insurance agents.
She said that at present, more than 21 lakh people are working as insurance agents in the insurance
companies of the public sector and if foreign investment comes in this area then the employment opportunities as an agent will reach one crore.
She said that four-five government companies are working in the insurance sector while 22 are private companies.
The Union Finance Minister said the situation of many companies is not good in them and if foreign investment comes, the condition of these companies will also improve and employment opportunities will also increase.
In view of all these situations, the government has decided to amend this law and they are confident
that the insurance sector will be greatly benefited by this, she said.
Ms Sitharaman said that with the inflow of foreign investment in the insurance sector, monetization will increase and will help in furthering the concept of ‘Atmanirbhar Bharat’.