Sabka Bima Sabki Raksha Amendment Bill 2025

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The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 marks a landmark reform in India’s insurance industry. Passed by Parliament on December 17, 2025, this bill amends key laws to boost foreign investment, strengthen regulations, and push toward “Insurance for All by 2047.” If you’re searching for details on the latest insurance reforms in India, including the shift to 100% FDI in insurance, this article breaks it down.

What is the Sabka Bima Sabki Raksha Amendment Bill 2025?

Introduced in the Lok Sabha on December 16, 2025, by Finance Minister Nirmala Sitharaman, the bill quickly passed both houses of Parliament. It amends three core laws:

Insurance Act, 1938
Life Insurance Corporation Act, 1956
Insurance Regulatory and Development Authority of India (IRDAI) Act, 1999

The bill’s slogan-inspired name—”Sabka Bima Sabki Raksha” (Insurance for All, Protection for All)—aligns with the government’s vision to expand affordable insurance coverage across India, especially in rural areas.

Major Highlight: 100% FDI in Insurance Sector

The most talked-about change is raising the Foreign Direct Investment (FDI) limit in insurance companies from 74% to 100%. This allows full foreign ownership, a step first hinted at in the 2025 Union Budget.

Why this matters:

Attracts global capital and technology transfer.
Encourages new insurers and intermediaries to enter the market.
Expected to lower premiums through increased competition.
Boosts job creation—jobs in the sector nearly tripled after the FDI limit rose from 26% to 74%.

India’s insurance penetration stands at about 3.7% of GDP (down slightly from 4% in 2022-23), far below global averages. This reform aims to deepen coverage and support schemes like PM Jeevan Jyoti Bima Yojana and PM Suraksha Bima Yojana.

Other Key Provisions in the Insurance Amendment Bill 2025

The bill introduces several reforms for better governance and consumer protection:

Stronger IRDAI Powers: The regulator gains tools like disgorgement (recovering wrongful gains), enhanced inspection rights over intermediaries, and clearer guidelines on commissions.
Policyholders’ Education and Protection Fund: A new fund to educate consumers and safeguard their interests.
Ease of Doing Business:
- Raises the threshold for IRDAI approval on share transfers from 1% to 5% of paid-up capital.
- One-time registration for insurance intermediaries.
- Removes minimum capital requirements (Rs 100 crore) for insurance co-operative societies.
LIC Autonomy: Greater freedom for Life Insurance Corporation of India to set up zonal offices and manage overseas operations.
Digital Infrastructure: Framework for secure use of digital tools in insurance, protecting policyholder data.
Naming Clarity: Requires “insurance” in the names of companies and intermediaries for better customer awareness.

What the Bill Leaves Out: Key Omissions

While progressive, the bill doesn’t address some industry demands:

No composite licensing (allowing one entity to offer life, general, and health insurance).
No reduction in minimum capital requirements for new insurers.
Limited changes for specialized insurers in SEZs/IFSCs.

Experts note these gaps could slow innovation, but the bill empowers IRDAI to notify new insurance classes flexibly.

Impact on Policyholders and the Insurance Sector

For consumers:

More choices and potentially cheaper policies.
Stronger protection against mis-selling.
Greater push for rural and affordable insurance.

For the industry:

Influx of foreign players could expand the ecosystem.
Better reinsurance capacity and risk management.
Alignment with global standards, making India a more attractive insurance hub.

As of December 18, 2025, the bill awaits President’s assent to become law. Once enacted, it could transform India’s insurance landscape, bringing us closer to universal coverage by 2047.