The Sabka Bima, Sabki Raksha Bill, is being tabled in the Lok Sabha today. It proposes several changes to India’s insurance sector that could impact key listed players like Max Financial, LIC, SBI Life, and Star Health. The effects vary depending on their business models and growth strategies.
The bill allows insurance companies to merge with non-insurance entities. This is a positive move for Max Financial Services, as it may enable the merger of Max Life Insurance into the parent company. Such a merger could simplify the corporate structure, remove holding company discount overhang, and unlock shareholder value.
The bill does not include open architecture for insurance agents. Open architecture would have allowed agents to sell products from multiple insurers, potentially increasing commission costs.
This is beneficial for LIC and SBI Life, which rely heavily on individual agents for new business. They are likely to retain their customer base without additional distribution costs.
The absence of a composite insurance licence limits insurers’ ability to operate across life, health, and general insurance under one entity.
HDFC Life, LIC, and Star Health Insurance may face delays in expanding into new segments. Life insurers cannot immediately enter health insurance, and health insurers cannot easily enter motor insurance.
The bill proposes allowing up to 100% Foreign Direct Investment (FDI) in insurance. This may attract new foreign players, especially in the health segment, increasing competition. Star Health Insurance and other health-focused insurers may see pressure on pricing and market share.
The minimum capital requirement for reinsurers is proposed to be reduced from ₹5,000 crore to ₹1,000 crore. This could attract new entrants, increasing competition for established players like GIC Re.
Read more: Savings vs BSBD Accounts: Which One Should You Use After RBI’s New Rules?
The Insurance Amendment Bill presents a mixed impact on listed insurance stocks. While Max Financial could potentially gain from mergers, other like HDFC Life, LIC, and Star Health may face expansion constraints. Health insurers could face heightened competition due to FDI, while reinsurers may encounter new market entrants.
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.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Dec 16, 2025, 11:51 AM IST
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