Lok Sabha: Bill proposing 100% FDI in insurance sector introduced
16 Dec 2025

Finance Minister Nirmala Sitharaman today introduced the Insurance Laws (Amendment) Bill, 2025 in the Lok Sabha.

The bill seeks to raise Foreign Direct Investment (FDI) limit in the insurance sector from 74% to a full 100%.

Titled Sabka Bima Sabki Raksha, it aims to bolster policyholder protection, deepen insurance penetration, and accelerate growth of India's insurance sector.

Bill aligns with government's vision
Long-term goals

The proposed amendments are in line with the government's vision of "Insurance for All by 2047."

The bill seeks to amend key legislations such as the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.

It also aims to improve ease of doing business in the sector by proposing one-time registration for insurance intermediaries.

Establishment of Policyholders' Education and Protection Fund
Policyholder protection

The bill proposes the establishment of a Policyholders' Education and Protection Fund to enhance insurance awareness and protect policyholders' interests.

It also seeks to give the Insurance Regulatory and Development Authority of India (IRDAI) powers to disgorge wrongful gains.

This would allow regulators to recover illegal or unfair profits made by insurers and intermediaries.

Bill aims to expand insurance coverage
Coverage expansion

The bill wants to raise the threshold for seeking IRDAI approval for share transfers in insurance companies from 1% to 5% of paid-up equity capital.

It is expected to expand insurance coverage and bring more citizens under its security net.

The proposed amendments are part of new-generation financial sector reforms that are aimed at promoting policyholders' interests, enhancing their financial security, and facilitating market entry for additional players.

The bill received Union Cabinet's approval
Cabinet approval

The bill was approved by the Union Cabinet on Friday before its introduction in Parliament.

It paves the way for merging non-insurance companies with insurance firms to accelerate sector growth.

Sitharaman had earlier indicated that 100% FDI would unlock India's insurance sector's full potential and also improve the coverage.