Lok Sabha passes Sabka Bima Sabki Raksha Bill to reform insurance laws

The Lok Sabha passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill 2025 to boost the growth of the insurance sector and strengthen policyholder protection.

The Bill aims to enhance regulatory oversight, improve transparency in rule-making, ease compliance requirements and raise foreign direct investment limits in the sector.

A key provision proposes allowing 100% FDI in insurance companies to attract long-term capital, boost competition and expand insurance coverage. It also seeks to ease the entry of foreign reinsurers by sharply reducing capital requirements, which could strengthen reinsurance capacity and risk diversification.

The legislation proposes to strengthen the powers of the Insurance Regulatory and Development Authority of India through enhanced enforcement authority, simplified compliance norms and clearer approval thresholds for equity transfers. It also grants greater operational autonomy to the Life Insurance Corporation of India, enabling faster expansion and restructuring, including overseas operations.

Finance Minister Nirmala Sitharaman said the government infused over Rs 17,000 crore into public sector insurers and expanded coverage through various insurance schemes.

She also highlighted the decision to waive GST on life and health insurance premiums and said insurance penetration has improved over the past 11 years.

Opposition members opposed higher FDI limits and raised concerns over the privatisation of the insurance sector.

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