The latest regulatory news from India, one of the fastest growing insurance markets in the world;
The Global Federation of Insurance Associations (GFIA) has written to India’s finance Minister welcoming the government’s move to make changes to its Insurance Act. GFIA supports the plans to remove the foreign equity cap, a long-anticipated move which follows India’s broader economic liberalisation efforts.
GFIA also appreciates the Indian ministry’s willingness to review regulatory safeguards introduced following previous amendments to the Insurance Act. This reassessment is crucial in ensuring that past measures do not unintentionally hinder the sector’s potential.
In the letter, GFIA notes that foreign insurers play a pivotal role in India’s insurance market since its liberalisation in 1999, with over two-thirds of Indian life and non-life insurers having foreign partners.
However, several foreign insurers had either reduced their investments or exited the market, indicating the need for further regulatory reforms.
To fully realise the benefits of increased foreign investment, GFIA urges the government to use the opportunity to reconsider rules that impose additional restrictions on insurers with foreign partners,
“India is one of the world’s most promising insurance markets, but competing economies have implemented more liberal investment regimes.” By promoting a more investor-friendly regulatory environment, India can attract new market entrants, create jobs, and expand insurance offerings for its citizens.
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