Daijiworld Media Network - New Delhi

New Delhi, May 3: The Union government has officially allowed 100% foreign direct investment (FDI) in the insurance sector through the automatic route, a move aimed at boosting overseas participation and capital inflows, according to a report.

As per the framework, foreign investments in insurance companies will still need to comply with provisions of the Insurance Act, 1938 and obtain necessary approvals from the Insurance Regulatory and Development Authority of India (IRDAI) to undertake insurance-related operations.

However, Life Insurance Corporation of India (LIC) will continue under a separate structure, with foreign investment capped at 20% under the automatic route. Investments in LIC will remain governed by the Life Insurance Corporation Act, 1956 along with relevant provisions of the Insurance Act.

The notification also mandates that in insurance companies with foreign ownership, at least one among the chairperson, managing director, or chief executive officer must be an Indian resident citizen.

Additionally, 100% FDI has been permitted for insurance intermediaries such as brokers, reinsurance brokers, consultants, corporate agents, third-party administrators, surveyors and loss assessors, managing general agents, and insurance repositories, as specified by IRDAI.

This development builds on earlier liberalisation efforts by the government. In February, the Department for Promotion of Industry and Internal Trade had notified the provision for full FDI in insurance following legislative amendments passed by Parliament in December 2025.

These changes were introduced through the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, which revised key provisions of the Insurance Act, LIC Act, and the Insurance Regulatory and Development Authority Act, 1999 to encourage greater investment and deepen insurance coverage across the country.

The latest notification formalises the policy, marking a significant step in opening up the insurance sector while maintaining regulatory safeguards and domestic oversight.