On May 19, 2021, the Government has notified the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2021. The Amendment makes the following rules further to amend the Indian Insurance Companies (Foreign Investment) Rules, 2015 :
- As per the Rules, the word “Resident Indian Citizen” shall have the meaning assigned to it in such policy as the Central Government may frame from time to time on foreign direct investment. [Rule 2(o)].
- The “Total Foreign Investment” in an Indian Insurance Company, shall mean the sum total of direct and indirect foreign investment by Foreign Investors in such company, calculated in such manner as is specified in regulations made by the Authority with regard to registration of Indian Insurance Companies. [Rule 2(p)].
- In an Indian Insurance Company having foreign investment, a majority of its directors, a majority of its Key Management Persons, and at least one among the chairperson of its Board, its managing director and its Chief Executive Officer, shall be Resident Indian Citizens. [Rule 4].
- Every Indian Insurance Company having foreign investment, existing on or before the date of commencement of the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2021, shall within one year from such commencement, comply with the requirements of the provisions of sub-rule (1).
- In an Indian Insurance Company having foreign investment exceeding forty-nine per cent for a financial year for which dividend is paid on equity shares and for which at any time the solvency margin is less than 1.2 times the control level of solvency, not less than fifty per cent. Of the net profit for the financial year shall be retained in general reserve; and not less than fifty per cent. of its directors shall be independent directors, unless the chairperson of its Board is an independent director, in which case at least one-third of its Board shall comprise of independent directors. [Rule 4A].
- In the principal rules, in rule 5, for the word “forty-nine”, the word “seventy-four” shall be substituted.
- In the principal rules, in rule 8, for the letters “FEMA”, the words, figures and brackets “Foreign Exchange Management Act, 1999 (42 of 1999)” shall be substituted.
Read Indian Insurance Companies (Foreign Investment) Rules, 2015 HERE
*Tanvi Singh, Editorial Assistant has put this story together.