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The Rajya Sabha passed the Insurance modification Bill, 2021 that will increase the utmost foreign investment allowed in AN insurer from forty ninth to seventy four.

·       The Bill amends the Insurance Act, 1938 to extend the utmost foreign investment allowed in AN Indian insurer.

·       The Act provides the framework for functioning of insurance businesses ANd regulates the connection between an insurance company, its policyholders, its shareholders, and also the regulator (the Insurance regulative and Development Authority of India).

Foreign investment:

·       The Act permits foreign investors to carry up to forty ninth of the capital in AN Indian insurer, that should be in hand ANd controlled by an Indian entity.

·       The Bill will increase the limit on foreign investment in AN Indian insurer from forty ninth to seventy four, and removes restrictions on possession and management.

·       However, such foreign investment could also be subject to further conditions as prescribed by the central government.

Investment of assets:

·       The Act needs insurers to carry a minimum investment in assets which might be decent to clear their claim liabilities.

·       If the insurance company is incorporated or domiciled outside Republic of India, such assets should be control in {india|India|Republic of Republic of India|Bharat|Asian country|Asian nation} in a very trust and unconditional with trustees United Nations agency should be residents of India.

·       The Act specifies in a proof that this may conjointly apply to AN insurance company incorporated in Republic of India, within which at least: 

(i)   33% capital is in hand by investors domiciled outside Republic of India, or

(ii) 33% of the members of the establishment ar domiciled outside Republic of India.

The Bill removes this clarification.