Insurance stocks gained on Friday as the Parliament on Thursday has approved Insurance Laws (Amendment) Bill, 2015. The bill was passed in the Rajya Sabha yesterday. Foreign direct investment limit in the insurance sector will get increased to 49% from current 26%, once the bill becomes Act when the President signs it.

Bajaj Finserv gained the most with a rise of (1.95%) followed by Reliance Capital (1.22%), Max India (0.63%) and Exide Industries (0.23%).

Rajesh Sud, managing director & chief executive officer, Max Life Insurance said, "The approval of Insurance Laws (Amendment) Bill, 2014 is a welcome step because it ends the uncertainty. This shows the Government's resolve to take forward its reform agenda. The Bill approves increase in foreign capital cap to 49%, which will allow the much required flow of long-term capital to the sector and the flexibility of different capital structures depending on each company's requirements.

With the availability of additional capital, the industry will be in a position to expand its distribution reach. In this critical phase of growth in the Life Insurance sector, the passing of this Bill will also attract the much needed domain capital. In a rapidly evolving sector, the Bill, by mandating the IRDAI to prescribe regulations on a number of insurance related subjects has equipped the Regulator to make course correction without having to wait for legislative amendments."

The Insurance Laws (Amendment) Bill, 2015 will replace an ordinance promulgated in December last year. Earlier, the Lok Sabha had passed the Insurance Laws (Amendment) Bill, 2015 on Mar. 4, 2015.