Insurance sector Current Affairs - 2019
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The Union Commerce and Industry Ministry has notified foreign direct investment (FDI) upto 49% in insurance and pension sector will be under automatic route.
In this regard, Department of Industrial Policy and Promotion (DIPP) has issued official notification to liberalise its FDI policy in insurance and pension sector.
However, FDI above 49% will be subject to approval of the Foreign Investment Promotion Board (FIPB). Prior to this, only up to 26% FDI was permitted through the automatic approval route in insurance and pension sector.
Union Government in 2015 had increased the FDI cap in insurance and pension sector to 49% from 26%, respectively. But it was subject to the condition that ownership and control remains with the Indian promoter at all times.
Thus, existing guidelines on Indian management and control will have to be verified by the respective regulators, Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority (PFRDA).
Presently there are 52 insurance companies operating in India, of which 28 are in general insurance and 24 are in life insurance business. FDI into the country has grown by record 40% to $29.44 billion during April-December 2015.
Tags: Business • Current Affairs 2016 • DIPP • Economy • FDI
HDFC has announced to sell its 9 per cent stake in HDFC Life Insurance to its British joint venture partner Standard Life for sum of 1,700 crore rupees.
Prior this agreement HDFC had 70.65 per cent stake while Standard life had 26 per cent stakes which will be change to 61.65 per cent and 35 per cent respectively.
This move was taken in line to increase the role of its foreign partner which followed the Centres approval to hike FDI to 49 per cent from 26 per cent in Insurance sector.
As per the agreement HDFC will issue 17.5 crore shares at the rate of Rs. 95 per share to Standard life.
Note: HDFC life in a Joint venture between HDFC and Standard life launched in 2000 and is the first private life insurer to be granted a licence to operate in India.
Key Facts of Insurance sector in India:
- There are over 52 insurance companies in India out of which 24 are in life insurance business and 28 are non-life insurers.
- Life Insurance Corporation (LIC) is the sole public sector company among Life Insurance Company and there are six public sector insurers among non-life insurers.
- Apart from that there is sole national re-insurer the General Insurance Corporation of India (GIC).
- The market size of India’s Insurance sector is 70 billion US dollars.
- Kotak Mahindra Bank is the first bank to set wholly-owned non-life insurance company.
- As per Pradhan Mantri Jan Dhan Yojana even the Zero balance account opened prior to August 28, 2014 get Rs 1,00,000 insurance cover.