New Delhi: A group of multinational insurers on Friday pitched for raising foreign direct investment ceiling in the insurance sector to 49 percent to help insurers raise capital necessary to fuel business growth.

"Over the years these foreign companies have become a genuine corporate citizen of this country so we request government to raise the investment ceiling much along the line you have done with other financial services industries," former Ambassador of the US to India Frank Wisner, who is leading of group of multinational insurers said here.

Currently, the FDI limit in the insurance sector at 26 percent.

Emphasising that foreign companies are the long term players in the insurance business, he said raising foreign investment limit will give them confidence and help them bring in higher capital which is required for the growth of the business.

Entry of foreign companies in the insurance market has resulted in expanding the product basket, Wisner said, adding the sector has generated about 3 million direction and indirect employment and modern practices introduced in the sector post liberalisation.

India's own national insurance company has grown by leaps and bounds as a result of introduction of competition, he said.

"It's timely for a number of reasons...India has huge demand for capital both foreign and domestic. Since 2009, it has been receiving less capital," he said.

"Capital today is looking for the market which offer best and good corporate governance, predictable returns and assured policy," he added.

The Insurance Amendment Bill, which seeks to raise the FDI cap in the private sector insurance companies to 49 percent from 26 percent, is now expected in the upcoming Budget.

The Insurance Laws (Amendment) Bill has been pending in the Rajya Sabha since December 2008.

The Union Cabinet had cleared the draft Bill on October 4, 2012 as part of slew of measures to allow FDI in various sectors.

The Standing Committee headed by senior BJP leader Yashwant Sinha, which had scrutinised the Bill, was against raising the ceiling on FDI in the sector arguing that it would expose the sector to global vulnerability.

At present, there are 52 insurance companies operating in India; of which 24 are in the life insurance business and 27 are in general insurance business.

(Agencies)

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