Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill passed in Parliament; key details here
The higher FDI cap is expected to expand insurance coverage, bring down premiums and create more jobs. The amendment will also encourage greater participation by foreign insurers in the Indian market, Finance Minister Nirmala Sitharaman said.
- Dec 17, 2025,
- Updated Dec 17, 2025 8:23 PM IST
The Rajya Sabha on December 17 passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, paving the way for a 100 per cent FDI allowance in the insurance sector, up from the earlier 74 per cent limit. The legislation was cleared through a voice vote, a day after it was approved by the Lok Sabha. The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, had earlier received approval from the Union Cabinet.
The higher FDI cap is expected to expand insurance coverage, bring down premiums and create more jobs. The amendment will also encourage greater participation by foreign insurers in the Indian market, Finance Minister Nirmala Sitharaman said.
On Tuesday, Finance Minister Nirmala Sitharaman said lifting the FDI cap would draw long-term capital, global technology and advanced risk management practices, resulting in more competitive pricing and a broader range of insurance products.
She also highlighted efforts to strengthen public sector insurers and recent GST relief on individual life and health insurance premiums as key measures to improve affordability.
Sitharaman told the House that opening up the insurance sector has already helped improve insurance penetration in the country and that there remains significant scope for further growth. She said raising the FDI limit to 100 per cent would enable more foreign insurers to enter India, noting that many global players are reluctant to operate through joint ventures due to various constraints.
Addressing concerns over employment, the finance minister said the move would, in fact, create more jobs. Citing official data, she pointed out that employment in the insurance sector has nearly tripled since the FDI limit was increased from 26 per cent to the current 74 per cent.
The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill aims to accelerate the growth and development of the insurance sector while strengthening protection for policyholders, as outlined in its statement of objects and reasons.
India’s insurance penetration, measured as total premium as a percentage of GDP, declined to 3.7 per cent in 2023–24 from 4 per cent in 2022–23. Life insurance penetration fell to 2.8 per cent from 3 per cent, while non-life insurance remained unchanged at 1 per cent. In August 2025, the finance ministry issued a notification replacing the existing 74 per cent foreign investment cap in insurance companies, as stipulated under the Insurance Act, 1938, as a precursor to enabling 100 per cent FDI.
The Bill also provides for the creation of a Policyholders’ Education and Protection Fund to safeguard policyholders’ interests. In addition, it seeks to improve ease of doing business for insurers and intermediaries, bring greater transparency to regulation-making, and strengthen regulatory oversight of the sector.
The Rajya Sabha on December 17 passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, paving the way for a 100 per cent FDI allowance in the insurance sector, up from the earlier 74 per cent limit. The legislation was cleared through a voice vote, a day after it was approved by the Lok Sabha. The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, had earlier received approval from the Union Cabinet.
The higher FDI cap is expected to expand insurance coverage, bring down premiums and create more jobs. The amendment will also encourage greater participation by foreign insurers in the Indian market, Finance Minister Nirmala Sitharaman said.
On Tuesday, Finance Minister Nirmala Sitharaman said lifting the FDI cap would draw long-term capital, global technology and advanced risk management practices, resulting in more competitive pricing and a broader range of insurance products.
She also highlighted efforts to strengthen public sector insurers and recent GST relief on individual life and health insurance premiums as key measures to improve affordability.
Sitharaman told the House that opening up the insurance sector has already helped improve insurance penetration in the country and that there remains significant scope for further growth. She said raising the FDI limit to 100 per cent would enable more foreign insurers to enter India, noting that many global players are reluctant to operate through joint ventures due to various constraints.
Addressing concerns over employment, the finance minister said the move would, in fact, create more jobs. Citing official data, she pointed out that employment in the insurance sector has nearly tripled since the FDI limit was increased from 26 per cent to the current 74 per cent.
The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill aims to accelerate the growth and development of the insurance sector while strengthening protection for policyholders, as outlined in its statement of objects and reasons.
India’s insurance penetration, measured as total premium as a percentage of GDP, declined to 3.7 per cent in 2023–24 from 4 per cent in 2022–23. Life insurance penetration fell to 2.8 per cent from 3 per cent, while non-life insurance remained unchanged at 1 per cent. In August 2025, the finance ministry issued a notification replacing the existing 74 per cent foreign investment cap in insurance companies, as stipulated under the Insurance Act, 1938, as a precursor to enabling 100 per cent FDI.
The Bill also provides for the creation of a Policyholders’ Education and Protection Fund to safeguard policyholders’ interests. In addition, it seeks to improve ease of doing business for insurers and intermediaries, bring greater transparency to regulation-making, and strengthen regulatory oversight of the sector.