IRDAI revokes guidelines on “Indian Owned and controlled” Insurance Companies

The Circular issued by IRDAI on Withdrawal of Guidelines on “Indian owned and controlled: 

Circular date30.07.2021
Subject

Withdrawal of Guidelines on “Indian owned and controlled

Effective date30.07.2021
ApplicabilityInsurance Companies
 Brief description

Overview of circular dated 30th July, 2021-

Insurance (Amendment) Act, 2021, notified on 25.03.2021, made the following amendments to sub-clause (b) of clause (7A) of section 2 of Insurance Act, 1938:

· Foreign investment ceiling has been increased from existing 49 percent to 74 percent;

· Explanation to sub-clause (b) of clause (7A) of Section 2, which mandated the requirement of “Indian owned and controlled” has been omitted.

The definitions of “Control”“Indian Control of an Indian Insurance Company” and “Indian Ownership” provided under Indian Insurance Companies (Foreign Investment) Rules, 2015 have been omitted vide Indian Insurance Companies (Foreign Investment) (Amendment) Rules, 2021.

Essence –

1. Earlier, IRDAI had issued guidelines on “Indian owned and controlled” issued for Indian insurance companies with an objective to bring more clarity on the issue of compliance with the manner of “Indian owned and controlled”.

2. In the meantime, Insurance (Amendment) Act, 2021 were notified wherein the requirement of “Indian owned and controlled” has been omitted. As a result, guidelines issued w.r.t has been withdrawn by the authority. 

Complete circular attached