New Delhi, India – December 16, 2025 : Finance Minister Nirmala Sitharaman introduced the landmark Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 in the Lok Sabha on Tuesday, paving the way for 100% FDI in the insurance sector—up from the current 74% cap. The bill amends three key laws: the Insurance Act (1938), Life Insurance Corporation Act (1956), and IRDAI Act (1999), aiming for “Insurance for All by 2047.”
Sitharaman emphasized Prime Minister Narendra Modi’s priority on universal coverage, noting government efforts during COVID to protect marginalized groups. The reforms seek to attract global capital, enhance technology transfer, and deepen penetration in India’s underinsured market.
Key Highlights of the 100% FDI Insurance Bill:
- Full Foreign Ownership: Allows 100% FDI, enabling foreign insurers complete control while mandating Indian residents in key roles like CEO/MD for domestic interests.
- Empowered LIC Board: Grants Life Insurance Corporation greater autonomy, eliminating government approval for new zonal offices and aligning overseas operations with local laws.
- One-Time Registration for Intermediaries: Introduces lifetime registration for agents and brokers, reducing renewals and boosting ease of doing business.
- Stronger Policyholder Protection: Heavier penalties for violations, faster claim settlements, and enhanced IRDAI powers, including disgorgement of illicit gains.
- Easier Reinsurance Entry: Reduces minimum net owned funds for foreign reinsurers from ₹5,000 crore to ₹1,000 crore, expanding risk management options.
The government argues these changes will inject fresh investments (sector has already seen ₹82,000 crore FDI), foster innovation, and create jobs. Opposition raised concerns over reduced state control in LIC and potential foreign dominance, but introduction proceeded amid protests on the bill’s Hindi title.
Analysts predict positive stock reactions for listed insurers like LIC, HDFC Life, and SBI Life, with long-term growth in products, digital services, and coverage for common citizens—cheaper policies, better claims, and more options.
Stay tuned for debates and passage updates on this transformative insurance sector reform.
