The government had allowed 26 per cent foreign investment in activities related to insurance like broking, third party administrators and surveyors and permitted FIIs and NRIs to also invest in insurers within the stipulated cap.

In case of insurance companies, the 26 per cent cap will include Foreign Direct Investment (FDI) and investments from Foreign Institutional Investors (FIIs) and Non-Resident Indians (NRIs).

Earlier, only FDI under the automatic route was allowed in insurance companies.

Under the norms notified, 26 per cent foreign investment including FDI, FII and NRI will be allowed under the automatic route in insurance companies, insurance brokers, Third Party Administrators (TPAs), surveyors and loss assessees.

The decision will come into force with immediate effect.

The companies bringing in foreign investment, the Press Note said, will have to obtain necessary licence from the Insurance Regulatory and Development Authority (IRDA) for undertaking prescribed activities.

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