New Delhi, Dec 17 : The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, aimed at modernizing India’s insurance framework, was passed by the Lok Sabha on Tuesday. Moved by Union Finance Minister Nirmala Sitharaman, the Bill was earlier cleared by the Union Cabinet ahead of the Winter Session.
The legislation introduces comprehensive amendments to the Insurance Act, 1938, the LIC Act, 1956, and the IRDAI Act, 1999, targeting wider insurance coverage, stronger regulatory oversight, and sectoral growth.
Key Provisions
FDI Increase: Raises foreign direct investment (FDI) limit in Indian insurance companies from 74% to 100%, aimed at attracting foreign capital, boosting competition, and promoting technology adoption.
Reinsurer NOF Requirement: Reduces Net Owned Funds for foreign reinsurers from Rs 5,000 crore to Rs 1,000 crore to enhance participation, risk diversification, and market capacity.
IRDAI Powers: Grants disgorgement powers to recover wrongful gains, strengthening enforcement similar to SEBI.
Ease of Compliance: Introduces one-time registration for insurance intermediaries, raises approval thresholds for equity transfers from 1% to 5%, and mandates formal SOPs for transparency in regulation making.
LIC Autonomy: Empowers LIC to open new zonal offices without prior government approval and restructure overseas operations according to host country laws.
The Bill also balances reforms with industry feedback, though certain demands, such as the introduction of a composite licence, were excluded or moderated.
Finance Minister Sitharaman underscored that the Bill’s mission is to accelerate sectoral growth, protect policyholders, and simplify the business environment for insurers and intermediaries, while aligning Indian insurance practices with global standards.