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New Delhi, Mar 3: The Insurance Laws Amendment Bill was introduced in the Lok Sabha today to replace an ordinance in this regard, amid stiff opposition from Left and TMC. The bill seeks to raise foreign investment cap to 49 per cent in the insurance sector and provides for imprisonment of up to 10 years for selling policies without registration with the regulator IRDA. Also Read - PM Modi Likely to Hold COVID-19 Review Meeting With Chief Ministers of 7 Worst-hit States Next Week

The Insurance Laws (Amendment) Bill, 2015, will also allow PSU general insurers to raise funds from the capital market and provides for increased penalty to deter multilevel marketing of insurance products. Also Read - Chidambaram Says Farm Bills 2020 Undermine Food Security System, Slams BJP For ‘Maligning’ Cong's 2019 Manifesto

Under the new provisions, the Life Insurance Council and the General Insurance Council would act as self-regulating bodies for the sector. “The proposed amendments are aimed at bringing about improvements and revisions in the laws relating to insurance business in India to remove archaic provisions and incorporate modern day practices emerging in a changing dynamic environment, which includes private participation,” says the Statement of Objects and Reasons of the Bill.

The Bill seeks to raise foreign investment limit in the sector from 26 per cent to 49 per cent. While up to 26 per cent will be under the automatic route, the remaining would be cleared through the FIPB.

The bill, which has been pending for long, was introduced by Minister of State for Finance Jayant Sinha after a Division of Votes, pushed for by Left and TMC. 131 votes were polled in favour and 45 against.

Left and TMC members contended that the House has no legislative competence as similar bill is pending in the RS. The bill is pending in Rajya Sabha. A bid to withdraw it from the Upper House last week was scuttled by opposition.

The Bill, which provides for a penalty of up to Rs 25 crore with imprisonment of up to 10 years for carrying out the business of insurance without obtaining IRDA certificate, has also raised the penalty for other offences.