Cabinet clears Insurance Amendment Bill, may be introduced in Parliament on Monday
The Bill seeks to raise FDI in insurance to 100%, listed to be introduced in Winter Session
- Dec 12, 2025,
- Updated Dec 12, 2025 6:41 PM IST
The Centre is likely to introduce the Insurance Amendment Bill, which aims to increase the foreign direct invest cap to 100% in the sector, in Parliament on Monday. According to sources, the Union Cabinet is understood to have cleared the Insurance Laws (Amendment) Bill in its meeting on Friday.
The government plans to introduce the Bill in the ongoing Winter Session of Parliament, which concludes on December 19. As per the Lok Sabha Bulletin, which was issued earlier, the Insurance Laws (Amendment) Bill 2025, which seeks to deepen penetration, accelerate growth and development of the insurance sector and enhance ease of doing business, is part of the 13 legislations listed for the upcoming session of Parliament.
At present, foreign direct investment in the insurance sector is capped at 74% and the government hopes that enhancing the cap would enable insurance companies to expand their operations in India. The proposal was announced by Finance Minister Nirmala Sitharaman in the Union Budget 2025-26.
“The FDI limit for the insurance sector will be raised from 74 to 100%. This enhanced limit will be available for those companies which invest the entire premium in India,” she had said, adding that the current guardrails and conditionalities associated with foreign investment will be reviewed and simplified.
As part of a comprehensive legislative exercise, the government also plans to amend the Life Insurance Corporation Act 1956 and the Insurance Regulatory and Development Authority Act 1999 along with the Insurance Act 1938. The amendments to the LIC Act propose empowering its board to take operational decisions, such as branch expansion and recruitment.
Experts noted that increasing the FDI cap in insurance to 100% will help attract substantial global capital, enhance market competitiveness, and significantly deepen insurance penetration across the country.
Narendra Ganpule, Partner and Insurance Industry Leader, Grant Thornton Bharat, said the move underscores the government's commitment to economic liberalisation and creating a robust, investor-friendly ecosystem. “The transition to 100% foreign ownership will eliminate previous complexities associated with finding domestic partners and is expected to attract new global players while allowing existing foreign participants to increase their stakes and autonomy,” he said.
The Centre is likely to introduce the Insurance Amendment Bill, which aims to increase the foreign direct invest cap to 100% in the sector, in Parliament on Monday. According to sources, the Union Cabinet is understood to have cleared the Insurance Laws (Amendment) Bill in its meeting on Friday.
The government plans to introduce the Bill in the ongoing Winter Session of Parliament, which concludes on December 19. As per the Lok Sabha Bulletin, which was issued earlier, the Insurance Laws (Amendment) Bill 2025, which seeks to deepen penetration, accelerate growth and development of the insurance sector and enhance ease of doing business, is part of the 13 legislations listed for the upcoming session of Parliament.
At present, foreign direct investment in the insurance sector is capped at 74% and the government hopes that enhancing the cap would enable insurance companies to expand their operations in India. The proposal was announced by Finance Minister Nirmala Sitharaman in the Union Budget 2025-26.
“The FDI limit for the insurance sector will be raised from 74 to 100%. This enhanced limit will be available for those companies which invest the entire premium in India,” she had said, adding that the current guardrails and conditionalities associated with foreign investment will be reviewed and simplified.
As part of a comprehensive legislative exercise, the government also plans to amend the Life Insurance Corporation Act 1956 and the Insurance Regulatory and Development Authority Act 1999 along with the Insurance Act 1938. The amendments to the LIC Act propose empowering its board to take operational decisions, such as branch expansion and recruitment.
Experts noted that increasing the FDI cap in insurance to 100% will help attract substantial global capital, enhance market competitiveness, and significantly deepen insurance penetration across the country.
Narendra Ganpule, Partner and Insurance Industry Leader, Grant Thornton Bharat, said the move underscores the government's commitment to economic liberalisation and creating a robust, investor-friendly ecosystem. “The transition to 100% foreign ownership will eliminate previous complexities associated with finding domestic partners and is expected to attract new global players while allowing existing foreign participants to increase their stakes and autonomy,” he said.