With the passage of three key economic legislations in Parliament, Finance Minster Arun Jaitley Friday exuded confidence that the insurance sector is expected to get a lot of foreign investment.
"Three major pieces of legislations-- the insurance law, the mining law, the coal allocation bill have all been approved by Parliament and therefore there will now be a lot of investment we (will) get in the insurance sector," he said.
"Today the first part of Parliament session has ended and it is a session which gives us immense amount of satisfaction. We have the budget proposals that were approved in the session," he said.
A Bill providing for raising the foreign investment cap in the insurance sector to 49 per cent was passed last week. The Insurance Laws (Amendment) Bill, 2015 sought to amend the Insurance Act, 1938 and the General Insurance Business (Nationalisation) Act 1972 and the Insurance Regulatory and Development Authority Act, 1999.
Last week, Minister of State for Finance Jayant Sinha had said foreign capital to the tune of Rs 25,000 crore was likely to flow into the insurance sector, with Parliament approving hike in foreign investment cap to 49 per cent.
"What we had estimated is, if we have to increase insurance penetration from 3 per cent currently to 6 per cent, then we will require capital somewhere in the range of Rs 40,000-50,000 crore, of which of course 49 per cent will have to come from FDI.
"So we are talking about (foreign) investment in the range of Rs 25,000 crore in the insurance sector to really ensure that we get to 6 per cent penetration in the medium term," Sinha had said.
"Now that we have a predictable, stable regime, we will see huge investment in insurance going forward," Sinha had said.
Explaining the new provisions in the Insurance Laws Amendment Bill, 2015, he had said insurance regulator IRDAI would have greater flexibility in regulating insurers while responsibility of insurance agents have been fixed for an orderly behaviour of the sector.