MoF Notifies Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025.

The MoF by way of Notification No. G.S.R. 928(E) dated 30.12.2025 notified the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025 ("Amendment Rules")¹ to amend the Indian Insurance Companies (Foreign Investment) Rules, 2015 ("Principal Rules").

The salient features of the Amendment Rules are as follows:

1. Amendment to definitions under Rule 2 of the Principal Rules:
   1. The definition of "Foreign Direct Investment" ("FDI") has been substituted to mean investment by non-resident entities or persons resident outside India and other eligible entities in the equity shares of an Indian Insurance Company under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 ("FEM NDI Rules"). The definition now expressly includes investment by Foreign Venture Capital Investors as permissible under the FEM NDI Rules.
   2. References to "FEMA Regulation 2000" have been substituted with references to the FEM NDI Rules.
   3. Clause (n) of sub-rule (1) of rule 2 has been omitted.
2. Substitution of terminology under Rule 3 of the Principal Rules:
   1. The term "Total Foreign Investment" has been substituted with "Foreign Direct Investment".
   2. The ceiling of seventy-four per cent of paid-up equity capital has been replaced with a reference to such percentage of paid-up equity capital as stipulated under the Insurance Act, 1938.
3. Substitution of Rule 4 of the Principal Rules: Rule 4 of the Principal Rules, which earlier required an Indian insurance company with foreign investment to have a majority of its directors and key managerial personnel as Resident Indian Citizens and at least one among the chairperson, managing director, or chief executive officer as a Resident Indian Citizen, has been substituted to provide that such company is now required to have at least one Resident Indian among its Chief Executive Officer, managing director, or chairperson of SEBI as a Resident Indian Citizen.
4. Omission of Rules and Clauses of the Principal Rules: Rule 4A, Clauses (iii), (v), and (vii) of sub-rule (3) of rule 9 have been omitted.
5. Amendment to Rule 5 of the Principal Rules: The reference to seventy-four per cent of total paid-up equity has been substituted with such percentage of total paid-up equity as provided under the Insurance Act, 1938.
6. Amendment to Rule 7 of the Principal Rules: References to sub-regulations of FEMA Regulations, 2000 have been substituted with references to the FEM NDI Rules.

The Amendment Rules came into force on 30.12.2025.

Footnote

1 Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025.

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