Insurance bill likely to be taken up by Rajya Sabha Monday

New Delhi, Aug 3: The insurance amendment bill, which could not be taken up for discussion in the Rajya Sabha on Thursday, is expected to be taken up Monday, official sources said Sunday.

The upper house members have sought time to study the proposed changes in the bill, that include increase in the foreign investment limit for the sector to 49 percent from the current 26 percent, approved by the cabinet last month.

While up to 26 percent foreign investment will be allowed automatically, beyond that will require approval through the Foreign Investment Promotion Board (FIPB). Control of the insurance venture will have to remain in Indian hands, the sources said.

Meanwhile, as a bolster to the government's efforts to get the insurance amendment bill passed, Biju Janata Dal (BJD) has decided to support the reforms.

"We have decided to support the insurance bill along with the changes proposed by the government," BJD leader in the Lok Sabha Bhartruhari Mahtab said here.

The Congress party on Friday decided to back the Trinamool Congress and Left parties' proposal to send the bill to the parliamentary Select Committee, which would scuttle any NDA move to get the legislation passed by convening a joint session of two Houses.

The Congress justified its decision saying that the amendments moved by the NDA government mark "substantive changes" from the original bill that was introduced by the first UPA government in 2008.

In the 243-member Rajya Sabha, the NDA has 59 members while the BJD has seven.

The amendment is expected to bring in much needed additional equity to the tune of Rs.25,000 crore to the insurance sector.

Insurance companies have a low level of penetration in the country for want of capital, with life insurance at below 4 percent of GDP and general insurance at less than 1 percent.