IRDA chairman J Harinarayan said that he strongly endorsed a hike in the foreign investment limit in insurance companies to 49% from the current 26% through the FDI route, instead of allowing FIIs to pick up to 23% in private insurers. This is what the Insurance Laws (Amendment) Bill also proposes.
“The draft Bill proposes 49% FDI. FII by nature is slightly more volatile than FDI and, in insurance, it is not desirable,” he told reporters after a Ficci conference.
There is hectic speculation that the government may dilute the clauses in the insurance Bill to allow FIIs to pick up 23% in private insurers, as an option to raise their foreign investment limit to 49%.