Quick Summary
The Lok Sabha on Tuesday, December 16, passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, paving the way for 100% foreign direct investment (FDI) in India's insurance sector. The government said the move would improve competition, attract long-term capital and make insurance products more affordable and accessible for policyholders. Replying to the debate in the House, Finance Minister Nirmala Sitharaman said that removing the existing FDI cap would help bring in globa
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FAQ :
The bill allows for 100% foreign direct investment (FDI) in India's insurance sector, increasing the previous limit.
The government expects the move to improve competition, attract long-term capital and advanced technology, and make insurance products more affordable and accessible.
The bill amends the Insurance Act, 1938, the LIC Act, 1956, and the IRDAI Act, 1999.
It allows mergers between insurance and non-insurance companies, strengthens IRDAI's powers, introduces new policyholder protection mechanisms, raises penalties, and lowers capital requirements for foreign reinsurance branches.
It introduces a Policyholders' Education and Protection Fund and empowers IRDAI to recover wrongful gains and return them to affected customers in cases of regulatory violations.
Perpetual registration removes the need for periodic licence renewals, allowing intermediaries to focus more on customer servicing and business growth rather than compliance.
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