Key Points:
The Lok Sabha passed the Sabka Bima Sabki Raksha Bill, raising the insurance sector’s FDI cap from 74% to 100%.
The Bill amends insurance laws to attract global investment, enhance technology transfer, improve products and boost insurance penetration.
While the government highlighted competition and transparency benefits, Opposition MPs raised concerns over foreign control and reduced state oversight.
The Lok Sabha on Tuesday, December 16, 2025 passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025. The Bill proposes to make amendments to the Insurance Act, 1938, the LIC (Life Insurance Corporation Act), 1967 and the IRDAI (Indian Regulatory and Development Authority of India) Act, 1999. It raises the cap of FDI to 100% from the earlier limit of 74%.
Union Finance Minister Nirmala Sitharaman introduced the Sabka Bima Sabki Rashi Bill in the Lok Sabha. She said that the Bill aims to create a smooth process for global companies to invest in India’s insurance sector, without having to partner up with domestic companies.
The Bill allows for improved insurance products and services, better capital investment and enhanced technology. Finance Minister Sitharaman also mentioned that the Bill would attract increased investment opportunities, enhance technological transfer and increase insurance penetration in the Indian market.
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The Bill provides greater power and autonomy to the LIC Act and the IRDAI Act. LIC will have more freedom to perform its operations, and more power in its decision making such as in setting up of new zonal offices. The Bill also allows LIC to operate without requiring prior government approvals, and will help it in faster expansion, better administration and better regional oversight.
The FDI limits in the insurance sector have seen multiple variations over the years. In 2015, it was raised to 49% from the earlier 26%, and then to 74% in 2021. The Bill also amends the net owned funds for foreign reinsurers to Rs. 1000 crores, reduced from earlier Rs. 5000 crores.
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As far as the powers of the IRDAI are concerned, the body would get higher enforcement powers. IRDAI would have the authority to eject wrongful measures and gains made by insurers or intermediaries.
Responding to the Opposition's claim of granting greater powers to foreign companies, FM Sitharaman said that all Indian laws would apply to the foreign companies. The global companies putting their investment would be governed and regulated like all other insurance entities.
The Opposition also criticised the fact that the Bill would give foreign companies more control over the money of the Indian people put in the Insurance sector. FM Sitharaman replied that when the competition increases, prices would fall down, leading to a better rate for the people. She also mentioned that the Bill aims for greater transparency, easing out multiple compliance related issues.
TMC MP Satabdi Roy criticised the Bill, pointing out that the insurance penetration in India is at 3.7%, less than the global average of 7%. She said that the increase in FDI to 100% doesn’t improve this problem. Congress MP Manickam Tagore had pointed out earlier that the state should have greater power in its hands regarding insurance money put in by Indians. Increased FDI would reduce the state’s powers to mitigate risks, he added.
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