Insurance bill to be taken up in winter session: Chidambaram

Finance Minister P Chidambaram said the Insurance Laws (Amendment) Bill, which seeks to raise the foreign equity cap in the sector to 49 per cent, will be taken up in the winter session of Parliament.

The government has agreed to a suggestion by opposition parties to take up the insurance bill in the next session of Parliament, after passing the pension bill in the current session, Chidambaram told reporters.

The insurance bill, pending in the Rajya Sabha since 2008, provides for increasing the foreign investment limit in the sector to 49 per cent from 26 per cent. The Standing Committee on Finance, headed by senior BJP leader Yashwant Sinha, did not favour raising the FDI ceiling.

The Lok Sabha today passed the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011, which provides for investment of funds in the equity market and opens the sector to at least 26 per cent FDI.

Recently, the Finance Minister had said the insurance industry requires USD 5-6 billion capital. The penetration ratio in the life insurance sector is 4.4 per cent and in the non-life segment, it is 0.76 per cent, meaning a vast majority of the population does not have
insurance.

There are over two dozen private sector insurance companies operating in India in the life and non-life sectors.