Insurance Current Affairs - 2019
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Former SBI Managing Director, Hemant Contractor, has been chosen to head the Pension Fund Regulatory and Development Authority (PFRDA). The position of Chairman has been vacant for almost a year after the previous Chairman Yogesh Aggarwal resigned over differences with the Finance Ministry regarding the appointment of a member to PFRDA. R.V.Verma, the Finance member, was filling in as Acting Chairman.
Interim PFRDA was established by the government through a bill for the same introduced in Parliament in 2003. Its goal was to promote, develop and regulate pension sector in India. The Pension Fund Regulatory & Development Authority Act was passed in 2013. PFRDA is authorized by Ministry of Finance, Department of Financial Services.
PFRDA must consist of a Chairperson and maximum of five members, out of which a maximum of three can be full time members. Members are appointed by the central government.
One of the major roles of the PFRDA today is to oversee NPS (National Pension System). NPS is a pension scheme run by the Government of India. It has been mandatory for central government employees from 2004 and voluntary for unorganized sector workers since 2009.
The Union Cabinet approved the proposal of increasing the Foreign Direct Investment (FDI) limit in the insurance sector to 49% from the existing 26%. The move is in sync with the proposal made by Finance Minister Arun Jaitley in his maiden Budget speech to raise the FDI cap in insurance sector from 26% to 49%.
However, the management control of insurance firms will be with the Indian companies only. The step to enhanced FDI limit is expected to benefit private sector insurance companies, which require a huge amount of capital.