The Indian government has introduced the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, aiming to revolutionize the country’s insurance sector. The bill proposes significant changes to the Insurance Act, 1938, the LIC Act, 1956, and the IRDA Act, 1999, with the goal of achieving universal protection by 2047. Key features of the bill include raising foreign direct investment (FDI) in the insurance sector from 74% to 100%, with the condition that one of the top officials must be an Indian citizen.
The bill also allows for sector-specific licenses, enabling insurers to operate in niche lines such as cyber, property, or marine insurance. Additionally, it permits mergers between non-insurance and insurance companies, and shifts from detailed statutory prescriptions to a regulation-driven framework, giving the Insurance Regulatory and Development Authority of India (IRDA) the authority to set operational norms.
Other notable provisions include establishing a Policyholders’ education and protection fund, expanding the definition of insurance intermediaries, and easing licensing requirements for surveyors and loss assessors. The bill also allows the Life Insurance Corporation (LIC) to establish zonal offices without prior approval from the Centre and enables overseas branches to maintain funds.
The government believes that the bill will accelerate growth, improve policyholder protection, bring transparency to regulations, and attract significant investments, creating more opportunities for insurers and intermediaries across India. The move to raise FDI to 100% is expected to attract more foreign investment, with the sector having already attracted Rs 82,000 crore through FDI. The bill is part of the government’s new-generation financial sector reforms, and its passage is expected to have a significant impact on the Indian insurance sector. Overall, the bill aims to make insurance coverage more accessible and affordable for all, and to establish India as a major player in the global insurance market.