17 December 2025 Punjab Khabarnama Bureau : The Lok Sabha on Tuesday passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, paving the way for allowing up to 100 per cent foreign direct investment (FDI) in the insurance sector, a move the government said would boost competition, attract global capital and make insurance more affordable.
The Bill, introduced earlier in the day by Finance Minister Nirmala Sitharaman, seeks to raise the existing FDI cap from 74 per cent to 100 per cent by amending the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.
Replying to the debate, Sitharaman said higher foreign investment would deepen the insurance market and benefit consumers. “Monopoly does not help. The more competition there is, the better the rates and products available to policyholders,” she said. The Finance Minister underlined that strengthening public sector insurers remained a priority, noting that sustained efforts had been made since 2014 to improve their financial health.
The legislation also allows the merger of a non-insurance company with an insurance firm, a provision aimed at facilitating consolidation and operational efficiency in the sector. However, it mandates that at least one top executive — the chairperson, managing director or chief executive officer — must be an Indian citizen.
The Bill provides for the creation of a Policyholders’ Education and Protection Fund, seeks to improve ease of doing business for insurers and intermediaries, enhance transparency in regulation-making and strengthen regulatory oversight
Summary:
The Lok Sabha has passed a key reform bill allowing up to 100% foreign direct investment (FDI) in the insurance sector. The move aims to attract global capital, strengthen insurers’ financial capacity, improve competition, and expand insurance coverage across India, supporting long-term growth of the sector.