New Delhi, July 29 -- Finance minister Nirmala Sitharaman on Monday said in the Lok Sabha that the proposed hike in the foreign direct investment (FDI) ceiling for insurance companies-from the current 74% to 100%-could unlock the sector's full potential, which is projected to grow at an annual rate of 7.1% over the next five years.

In a written response, she noted that India's insurance sector is expected to expand faster than both the global and emerging market average growth rates.

She clarified that the proposed FDI increase is an enabling provision, allowing interested companies to explore a higher foreign investment threshold.

Along with raising the FDI ceiling, the Bill also seeks to allow composite licensing so that a single ent...