Parliament Passed Sabka Bima Sabki Raksha Bill: Allowed 100% FDI

On December 17, 2025, the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 was passed by Parliament. The Bill amends 3 insurance-related legislations, namely the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.

The reforms aim to extend insurance coverage to people, households, and enterprises, deepen insurance penetration, improve ease of doing business, and strengthen regulatory oversight and governance. These measures are intended to strengthen the Indian insurance sector and enhance financial resilience of the economy.

Allowed 100% Foreign Investment in Insurance Sector

One of the major features of the Bill is the provision to allow up to 100% Foreign Direct Investment (FDI) in insurance companies. This reform is intended to facilitate the entry of more foreign players into the Indian insurance market. It is expected to support capital augmentation, adoption of advanced technology, and the introduction of global best practices, while also generating employment opportunities. Increased competition is likely to enhance efficiency in insurance products and services, benefiting citizens.

Measures to Promote Ease of Doing Business

The Bill promotes ease of doing business for insurance intermediaries by introducing one-time licensing and providing for suspension of licences instead of immediate cancellation. For insurers, the limit for seeking prior regulatory approval for transfer of share capital has been increased from 1% to 5%. 

The Net Owned Fund requirement for Foreign Reinsurance Branches has been reduced from ₹5,000 crore to ₹1,000 crore. The Bill also grants LIC the autonomy to open zonal offices within the country and to align its foreign offices with the laws and regulations of their respective jurisdictions.

To safeguard policyholders, the Bill provides for the creation of a Policyholders’ Education and Protection Fund to promote insurance awareness. It also mandates that policyholders’ data be collected and protected in accordance with the DPDP Act, 2023.

Also Read: Income Tax Slab Changes in 2025: How Much Can You Save Under the New Tax Regime

Strengthening Regulatory Framework

Regulatory governance is strengthened through the introduction of standard operating procedures for regulation-making and by mandating a consultative process. The IRDAI is empowered to disgorge wrongful gains from insurers and intermediaries. Penalties have been rationalised, and factors for the imposition of penalties have been introduced.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.