{"id":3776,"date":"2021-04-01T09:54:32","date_gmt":"2021-04-01T09:54:32","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=3776"},"modified":"2021-04-01T09:56:02","modified_gmt":"2021-04-01T09:56:02","slug":"insurance-amendment-act-2021","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/insurance-amendment-act-2021\/","title":{"rendered":"Insurance (Amendment) Act 2021: A Complete Guide"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Recently, the GOI (Government of India) has passed the Insurance Amendment Act 2021, on 25.03.2021, to amend the provisions of the Insurance Act 1938. <\/p>\n\n\n\n<p>Further, the\nsaid amended act has received the presidential assent on 25.03.2021 and will\ncome into effect from the date chosen for publication by the Central\nGovernment.<\/p>\n\n\n\n<p>In this learning blog, we will discuss the objective and key provisions of the Insurance Amendment Act 2021.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a54cb272e599\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a54cb272e599\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-amendment-act-2021\/#Key_objective_of_the_Insurance_Amendment_Act_2021\" title=\"Key objective of the Insurance Amendment Act 2021\">Key objective of the Insurance Amendment Act 2021<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-amendment-act-2021\/#Key_Provisions_of_the_Amended_Insurance_Act\" title=\"Key Provisions of the Amended Insurance Act\">Key Provisions of the Amended Insurance Act<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-amendment-act-2021\/#Substitution_of_Section_2_Clause_7A_Sub_Clause_b\" title=\"Substitution of Section 2 Clause (7A) Sub Clause (b)\">Substitution of Section 2 Clause (7A) Sub Clause (b)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-amendment-act-2021\/#Amendment_in_Section_27\" title=\"Amendment in Section 27\">Amendment in Section 27<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-amendment-act-2021\/#Substitution_of_Section_114_Subsection_2_Clause_aaa\" title=\"Substitution of Section 114 Subsection (2) Clause (aaa)\">Substitution of Section 114 Subsection (2) Clause (aaa)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-amendment-act-2021\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_objective_of_the_Insurance_Amendment_Act_2021\"><\/span>Key objective of the Insurance Amendment Act 2021<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The key objective of the act is to achieve the purpose of the Government\u2019s FDI (Foreign Direct Investment) Policy by raising the threshold limit of the foreign investment in the Indian insurance companies from the prevailing 49 per cent to 74 per cent, and to permit the foreign ownership and control with the safeguards.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/how-to-get-insurance-broker-license-in-india\/\">How to Get Insurance Broker License in India<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Provisions_of_the_Amended_Insurance_Act\"><\/span>Key Provisions of the Amended Insurance Act<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The key\nprovisions of the amended Insurance Act can be summarised as:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Substitution_of_Section_2_Clause_7A_Sub_Clause_b\"><\/span>Substitution of Section 2 Clause (7A) Sub Clause (b)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The existing section 2 clause (7A)\nsub clause (b) will be substituted with new provisions, which are as follows:<\/p>\n\n\n\n<p>(<em>b<\/em>) in which the total\naggregate holdings of the equity shares by the foreign investors comprising of\nportfolio investors do not exceed 74 per cent of the total paid-up equity\ncapital of such an Indian Insurance Company and the foreign direct investment\nwill be subject to the conditions &amp; manner, as may be specified.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Amendment_in_Section_27\"><\/span>Amendment in Section 27<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It shall be\nnoted that in the provision of section 27 of the principal Act, i.e., the Insurance\nAct 1938, the explanation stated in sub-section (7) shall stand omitted.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Substitution_of_Section_114_Subsection_2_Clause_aaa\"><\/span>Substitution of Section 114 Subsection (2) Clause (aaa)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It shall be noted that in the provision of section 114 subsection (2) clause (aaa) of the principal Act, i.e., <strong><em>Insurance Act 1938<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Insurance_Act,_1938\" class=\"text-primary\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>, shall be substituted with the new one, which is as follows:<\/p>\n\n\n\n<p>(aaa) the conditions and the manner of the foreign direct investment under sub-clause (b) of clause (7A) of section 2.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In a nutshell, to accomplish the objective of the Government\u2019s FDI Policy, the government has amended the provisions of the Insurance Act 1938 and has increased the limit of Foreign Investment in the Indian Insurance Companies from 49 to 74%. The said amended act will be in force from the date assigned by the government for publication in the Official Gazette.&nbsp;  <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/what-role-does-irda-play-in-the-development-of-insurance-sector\/\">What Role Does IRDA Play in the Development of Insurance Sector?<\/a><\/mark><\/p>\n\n\n<a href=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/04\/Insurance-Amendment-Act-2021.pdf\" class=\"pdfemb-viewer\" style=\"\" data-width=\"max\" data-height=\"max\"  data-toolbar=\"bottom\" data-toolbar-fixed=\"off\">Insurance-Amendment-Act-2021<br\/><\/a>\n<p class=\"wp-block-pdfemb-pdf-embedder-viewer\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recently, the GOI (Government of India) has passed the Insurance Amendment Act 2021, on 25.03.2021, to amend the provisions of the Insurance Act 1938. Further, the said amended act has received the presidential assent on 25.03.2021 and will come into effect from the date chosen for publication by the Central Government. In this learning blog, [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":3780,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[44,50],"tags":[557],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3776"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=3776"}],"version-history":[{"count":13,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3776\/revisions"}],"predecessor-version":[{"id":3808,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3776\/revisions\/3808"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/3780"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=3776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=3776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=3776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}