Insurance Regulatory and Development Authority of India (IRDA)issues guidelines on "Indian owned and controlled"
The Insurance Laws (Amendment) Act,
2015 (Act) gave an impetus to the capital deprived insurance sector by
raising the Foreign Direct Investment (FDI) cap in an Indian Insurance
Company (IIC) from 26% to 49%. While doing so, the Act prescribed that
ownership and control of the IIC should remain with the Indian promoter/
shareholder. The Central Government also notified
the Indian Insurance Companies (Foreign Investment) Rules, 2015 which
prescribe the procedure with respect to the increase in foreign investment
limit in IICs. Now, in order to provide more clarity
on the issue of compliance with the Indian owned and controlled requirement
for IICs, the Insurance Regulatory and Development Authority of India
(IRDA) has issued guidelines on 19 October 20151 (Guidelines). The Guidelines come into force from
the date of their issue i.e. from 19 October 2015. This alert summarizes the key
features of the Guidelines issued by the IRDA.