Both of India’s houses of Parliament have passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 introducing major reforms including allowing 100% foreign ownership in insurance companies in the country.
The upper house of Parliament, the Rajya Sabha, passed the Bill on 17 December 2025, a day after the lower house, the Lok Sabha, did so.
Commenting on the 100% FDI investment decision, the Finance Ministry said in a statement, “This will help in capital augmentation, adoption of advanced technology and bringing global best practices along with increasing employment opportunities. Increased competition would drive efficiency in products and services, proving beneficial for the citizens.”
Other provisions in the Bill include:
- Ease of doing business is being promoted for intermediaries through provisions for one-time licensing and the suspension of licences rather than immediate cancellation.
- For insurers, the limit of seeking prior regulatory approval for transfer of share capital has been raised from 1% to 5%. The Net Owned Fund requirement of Foreign Reinsurance Branches has been reduced from INR50bn ($554.4m) to INR10bn. LIC has been provided autonomy to open zonal offices in the country and to align its foreign offices with the laws and regulations of their respective jurisdiction.
- To protect the interests of policyholders, a dedicated fund, namely Policyholders’ Education and Protection Fund, will be set up to spread awareness about insurance. Policyholders’ data would now be required to be collected and protected in alignment with the Digital Personal Data Protection Act, 2023.
- Regulatory governance is being strengthened by introducing a standard operating procedure for regulation-making and mandating the process to be consultative. IRDAI is being given the power to disgorge wrongful gains from insurers and intermediaries. Penalties are being rationalised and factors for the imposition of penalties are being introduced.
“The reforms are aimed at extending insurance coverage to people, households and enterprises, deepening insurance coverage, providing ease of doing business, improving regulatory oversight and governance. All these measures would lead to the strengthening of the Indian insurance sector to provide financial resilience to the Indian economy,” said the ministry’s statement. M