FPIs, NRIs can invest upto 26% in insurance

 The Reserve Bank on Thursday said overseas investors, including FPIs and NRIs, can invest up to 26 per cent in insurance and allied activities through the automatic route.

"Effective from February 4, 2014, foreign investment by way of FDI, investment by FIIs/FPIs and NRIs up to 26 per cent under automatic route shall be permitted in insurance sector," RBI said in a circular.

Earlier in February, the government had allowed 26 per cent foreign investment in activities related to insurance like broking, third party administrators and surveyors and allowed FIIs and NRIs to invest in insurers within the stipulated cap.

In case of insurance companies, the 26 per cent cap will include Foreign Direct Investment (FDI) and investments from Foreign Institutional Investors (FIIs) and Non-Resident Indians (NRIs), said a DIPP press note.

Earlier, only FDI under the automatic route was allowed in insurance companies.

Foreign Portfolio Investors (FPIs) encompass all foreign institutional investors (FIIs), their sub-accounts and qualified foreign investors (QFI) under a new regime that came into force on June 1.