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- Finance Minister has proposed a 100% foreign direct investment(FDI) in the insurance intermediaries in the Union Budget 2019.
- Insurance intermediaries are the backbone of the industry.They help in distribution of insurance policies and also help customers get attractive rates for the products.
- Insurance intermediaries include insurance brokers, insurance repositories, surveyors and loss assessors and third-party administrators (TPA).
- In 2014,a panel formed by the IRDAI under Suresh Mathur had also suggested that 100% FDI be allowed over three years.However,the suggestions of the panel were not implemented as FDI cap in the overall insurance industry was raised from 26% to only 49%.
- However,experts have said that this would move will decimate most of the lndian brokers engaged in direct insurance and reinsurance broking and who do not have a joint venture with any overseas broker.
- On the other hand,some experts have said that the hike in FDI will bring in more technology and efficiency in the segment and boost insurance penetration.
