Insurance Laws (Amendment) Bill, 2025 Introduced
- 16 Dec 2025
On 16 December 2025, Union Finance Minister Nirmala Sitharaman introduced the Insurance Laws (Amendment) Bill, 2025, titled Sabka Bima Sabki Raksha, in the Lok Sabha to strengthen policyholder protection and expand insurance coverage.
Key Points
- Objective of the Bill: The Bill aims to deepen insurance penetration, strengthen policyholder protection, and accelerate the growth of India’s insurance sector in line with the vision of Insurance for All by 2047.
- Legislative Amendments: It seeks to amend three major laws: the Insurance Act, the Life Insurance Corporation Act, and the IRDAI Act.
- FDI Liberalisation: The Bill proposes raising the Foreign Direct Investment limit in insurance companies from 74 per cent to 100 per cent to attract long-term foreign capital and advanced technologies.
- Policyholder Protection Fund: It provides for the establishment of a Policyholders’ Education and Protection Fund to improve insurance awareness and safeguard consumer interests.
- Regulatory Powers: The Insurance Regulatory and Development Authority of India is proposed to be empowered to disgorge wrongful gains by recovering illegal or unfair profits made by insurers and intermediaries.
- Digital Infrastructure: The Bill creates a legal framework for digital public infrastructure in insurance, focusing on innovation, data security, privacy, and cybersecurity.
- Ease of Doing Business: It proposes one-time registration for insurance intermediaries and raises the IRDAI approval threshold for share transfers from 1 per cent to 5 per cent of paid-up equity capital.
- Reinsurance Sector Boost: The Net Owned Fund requirement for foreign reinsurers is proposed to be reduced from ₹5,000 crore to ₹1,000 crore, encouraging greater global participation.
- LIC Autonomy: The Bill grants greater operational flexibility to the Life Insurance Corporation of India, allowing it to establish zonal offices and align overseas operations with local laws.
- Regulatory Governance: Amendments propose a Standard Operating Procedure for regulation-making and a transparent, rational framework for imposing penalties under the IRDAI Act.
