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.