Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2021

(c) Applications for foreign direct investment in private banks having joint venture or subsidiary in insurance sector may be addressed to the Reserve Bank for consideration in consultation with the Insurance Regulatory and Development Authority of India, in order to ensure that the limit of foreign investment applicable for the insurance sector as specified in serial number F. 8.1 and F. 8.2 is not breached.

under the heading “Sectoral Cap,” for the entry, the following entry shall be substituted, namely: “74%”

(a) Insurance Company

(b) Insurance Brokers

(c) Third Party Administrators

(d) Surveyors and Loss Assessors

(e) Other Insurance Intermediaries appointed under the provisions of Insurance Regulatory and Development Authority Act, 1999 (41 of 1999)

under the sub-heading “Other conditions,”–

(A) in clause (a), for the words “forty-nine,” the word “seventy-four” shall be substituted;

(B) in clause (b), for the words “forty-nine,” the word “seventy-four” shall be substituted;

(C) for clause (d), the following clause shall be substituted namely:

(d) (I) In an Indian Insurance Company having foreign investment-

(i) a majority of its directors;

(ii) a majority of its Key Management Persons; and

(iii) at least one among the Chairperson of its Board, its Managing Director and its Chief Executive Officer, shall be Resident Indian Citizens.

Explanation: For the above purposes, the expression- “Key Management Person” shall have the same meaning as assigned to it in guidelines made by the Insurance Regulatory and Development Authority of

India on corporate governance for insurers in India.

(II) An Indian Insurance company having foreign investment shall comply with the provisions under the Indian Insurance Companies (Foreign Investment) Rules, 2015, as amended from time to time and applicable rules and regulations notified by the Department of Financial Services or the Insurance Regulatory and Development Authority of India from time to time.;

(D) in clause (e), for the figures “2014,” the figures “2019” shall be substituted;

(E) in clause (g), for the portion beginning with the words “the condition of India owned and controlled,” and ending with the words “key management persons,” the following shall be substituted namely:

the composition of the Board of Directors and key management persons of Intermediaries or Insurance Intermediaries;

(F) for clause (k), the following clause shall be substituted, namely:

(k) Terms “Equity Share Capital,” “Foreign Direct Investment” (FDI), “Foreign Investors,” “Foreign Portfolio Investment,” “Indian Insurance Company,” “Indian Company,” “Non-resident Entity,” “Public Financial Institution,” “Resident Indian Citizen,” “Total Foreign Investment” shall have the same meaning as provided in Notification No. G.S.R 115 (E), dated the 19^th February, 2015 issued by Department of Financial Services and regulations issued by Insurance Regulatory and Development Authority of India from time to time.

(a) No Indian Insurance company shall allow the aggregate holdings by way of total foreign investment in its equity shares by foreign investors, including portfolio investors, to exceed forty-nine seventy-four percent of the paid-up equity capital of such Indian Insurance Company.

(b) The foreign investment up to forty-nine seventy-four percent of the total paid-up equity of the Indian Insurance Company shall be allowed on the automatic route subject to approval or verification by the Insurance Regulatory and Development Authority of India.

(d) An Indian Insurance company shall ensure that its ownership and control remain at all times in the hands of resident Indian entities as determined by Department of Financial Services or Insurance Regulatory and Development Authority of India as per the rules or regulation issued by them from time to time.

(e) Foreign portfolio investment in an Indian Insurance company shall be governed by the provisions contained in Chapter-IV, rule 10 and rule 11 read with Schedule-II of these rules and provisions of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 2019.

(g) The foreign equity investment cap of 100 per cent shall apply on the same terms as above to insurance brokers, re-insurance brokers, insurance consultants, corporate agents, third party administrator, Surveyors and Loss Assessors and such other entities, as may be notified by the Insurance Regulatory and Development Authority of India from time to time. However, the condition of Indian owned and controlled, as specified in clause (d) above, shall not be applicable to Intermediaries and Insurance Intermediaries and composition of the Board of Directors and key management persons the composition of the Board of Directors and key management persons of Intermediaries or Insurance Intermediaries shall be as specified by the concerned regulators from time to time.

(k) Terms ‘Control’, ‘Equity Share Capital’, ‘Foreign Direct Investment’ (FDI), ‘Foreign Investors’, ‘Foreign Portfolio Investment’, ‘Indian Insurance Company’, ‘Indian Company’, ‘Indian Control of an Indian Insurance Company’, ‘Indian Ownership’, ‘Non-resident Entity’, ‘Public Financial Institution’, ‘Resident Indian Citizen’, ‘Total Foreign Investment’ will have the same meaning as provided in Notification No. G.S.R 115 (E), dated the 19^th February, 2015 issued by Department of Financial Services and regulations issued by Insurance Regulatory and Development Authority of India from time to time.