INDUSTRY
100% FDI in insurance via automatic route notified; LIC exempted with 20% cap
- IBJ Bureau
- May 03, 2026
The Central government has notified 100 per cent foreign direct investment (FDI) in insurance companies under the automatic route, which allows greater participation from foreign investors.
Life Insurance Corporation of India (LIC) will remain under a separate framework, with foreign investment capped at 20 per cent under the automatic route.
The Department for Promotion of Industry and Internal Trade has issued a Press Note 1 (2026 Series) stating that foreign investment, including investment by portfolio investors, in domestic insurance companies will be permitted under the automatic route, subject to regulatory clearance and verification by the Insurance Regulatory and Development Authority of India (IRDAI).
The policy amendment aligns the foreign investment framework with the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025. The Finance Ministry had earlier notified that the provisions of the law, except Section 25, would take effect from February 5.
Insurance companies with FDI must have at least one resident Indian citizen serving as chairperson, managing director or chief executive officer.
Any increase in foreign shareholding must comply with pricing guidelines prescribed by the Reserve Bank of India under the Foreign Exchange Management Act (FEMA) regulations.
The 100 per cent limit will also apply to insurance intermediaries, including reinsurance brokers, corporate agents, third-party administrators, surveyors and loss assessors, managing general agents and insurance repositories, subject to the IRDAI norms.
Report By
View Reporter News