FinMin Notifies Draft Amendments to Indian Insurance Companies (Foreign Investment) Rules, 2015 [Read Notification]
The Ministry of Finance proposed moving FDI in insurers to the automatic route under IRDAI oversight and aligning limits with the Insurance Act, 1938.
Indian Insurance Companies - Taxscan
Indian Insurance Companies - Taxscan
The Ministry of Finance (Department of Financial Services) has issued Notification G.S.R. 591(E) dated August 29, 2025, publishing draft amendments to the Indian Insurance Companies (Foreign Investment) Rules, 2015. These draft rules are open for public comments and suggestions for 15 days before being finalized and published in the Gazette of India.
Key Highlights of the Draft Notification:
- FEMA Update: References to the old FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, will be replaced with the updated FEMA (Non-Debt Instruments) Rules, 2019.
- Foreign Investment Cap: The earlier fixed cap of 74% foreign investment in Indian insurance companies will be replaced with the phrase “as per the limit stipulated by the Insurance Act, 1938”, giving flexibility for future changes.
- Automatic Route: Foreign investment proposals in Indian insurance companies will now be allowed under the automatic route, subject to verification by the Insurance Regulatory and Development Authority of India (IRDAI).
- Simplification: Several older sub-rules and clauses (like parts of Rule 4, Rule 4A, and Rule 9) are proposed to be omitted to make the rules simpler and more consistent.
By aligning with FEMA (NDI) Rules, 2019, allowing automatic route investments under IRDAI supervision and linking the investment cap to the Insurance Act, 1938, the draft amendments aim to encourage greater foreign participation while ensuring regulatory control.
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