#1 – FDI limit to increase to 100% from 49% for insurance intermediaries

Insurance intermediaries are insurance middlemen that help in selling insurance policies by bringing the customer and the insurance company on the same platform. To promote insurance selling and to increase the number of intermediaries in the insurance segment, the Finance Minister proposed a hike in the FDI limit of intermediaries. From the current 49%, the limit has been proposed to rise to 100%.

The impact

  • Higher limit on investments by foreign companies would allow foreign intermediaries to set up their business in India and increase the number of insurance intermediaries
  • As the number of intermediaries would grow, the penetration of insurance would increase. This would also cause insurance products to reach even the remotest parts of the country
  • Existing intermediaries can benefit from an increase in capital infusion by enhancing their technology and developing their distribution channel