The Indian parliament has passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, allowing insurance companies to have 100% foreign direct investment (FDI), an increase from the previous 74% cap. This is expected to improve capital augmentation, adoption of technology, bring global best practices to insurance in India, and increase employment and competition.
The bill also introduces the ease of doing business for intermediaries through provisions of one-time licensing and licence suspension, instead of immediate cancellation of licences.
Insurers can now seek prior regulatory approval when the transfer of share capital is 5%, instead of the previous 1%. The net owned fund requirement of foreign reinsurance branches has been reduced to INR10 billion (USD110.2 million) from INR50 billion.
The new amendment changes the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999.
The government-owned Life Insurance Corporation of India, the insurance service provider in India incorporated by the Life Insurance Corporation Act, 1956, now has the autonomy to operate zonal offices in the country and align its foreign offices with the laws and regulations of the respective jurisdictions.
A dedicated fund has also been established to increase awareness of insurance among policyholders. The Digital Personal Data Protection Act, 2023, will also protect their information.
To strengthen regulatory governance in insurance, a standard operating procedure has been introduced requiring mandatory consultations. The Insurance Regulatory and Development Authority of India will also be able to handle wrongful gains from insurers and intermediaries. The rationale and factors for penalties have also been introduced.
The bill’s name can be translated as “everyone’s insurance, everyone’s protection” and parliament passed the legislation on 17 December 2025.
