Thursday 29 October 2015

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 2015 (Guidelines).

The Guidelines come into force from the date of their issue i.e. from 19 October 2015.

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