Centre notifies 100% FDI in insurance companies

The Centre on Saturday notified 100 per cent Foreign Direct Investment (FDI) in insurance companies under the automatic route, permitting wider participation from overseas investors.

"Foreign investment in this sector shall be subject to compliance with the provisions of the Insurance Act, 1938(4 of 1938), and the condition that Companies receiving FDI shall obtain necessary licence or approval from the Insurance Regulatory and Development Authority of India for undertaking insurance and related activities," reads the notification.

However, the framework for Life Insurance Corporation of India (LIC) will be separate, with foreign investment capped at 20 per cent under the automatic route.

"Foreign investment in LIC shall be subject to compliance with the provisions of the Life Insurance Corporation Act, 1956 (31 of 1956), and such other provisions of the Insurance Act, 1938 (4 of 1938), as are applicable to LIC as per the provisions of section 43 of the Life Insurance Corporation Act, 1956 (31 of 1956)."

Further, the rules mandate that at least one of the chairperson of the board, managing director, or chief executive officer must be an Indian resident citizen in an Indian insurance company with foreign investment.

Insurance intermediaries including insurance brokers, reinsurance brokers, insurance consultants, corporate agents, third party administrator, Surveyors and Loss Assessors, managing general agents, insurance repositories and such other entities have also been permitted 100 per cent foreign investment under the automatic route.

This comes after the Department for Promotion of Industry and Internal Trade (DPIIT) under the Commerce and Industry Ministry had already notified 100 per cent FDI in the insurance sector in February.

In December 2025, Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, which brought key changes to the insurance framework.